ATHENS — In an ominous sign Sunday that Greece is speeding toward a banking collapse, Greek Prime Minister Alexis Tsipras announced that Greek banks will be closed Monday amid last-ditch discussions about his nation’s economic future.
A decision to close banks on Monday was a sign that Greece’s half-decade battle to stay on the shared euro currency may swiftly be coming to an end. ATMs in Athens were running out of money, and tensions were running high Sunday as Greeks stood in line for hours to scrape together petty cash for basic supplies. Lines mounted at gas stations as worried residents topped off their tanks for what could be a period of time in a cashless nation.
The measure also threatened to deal a grievous blow to Greek tourism, one of the few remaining supports to the country’s economy, as nations warned their citizens to bring extra cash to Greece in if they planned to travel there.
There were signs that Greece’s creditors – the International Monetary Fund and euro-zone governments – were leaving the door open to negotiations. But it remained deeply unclear on Sunday ahead of a Tuesday repayment deadline how Greece would be able manage its finances without going into default.
“The decision not to prolong financial aid to Greece is offensive, and it’s a disgrace for Europe in general,” Tsipras said in a brief Sunday evening address broadcast across Greek television networks. He said that the Bank of Greece had recommended that banks be closed and controls on bank withdrawals and transfers be imposed starting Monday.
Earlier, Piraeus Bank CEO Anthimos Thomopoulos had told journalists “no” when asked whether Greek banks would open Monday, as he left a crisis meeting convened at the Greek Finance Ministry.
Tsipras said that he had asked E.U. leaders to extend their assistance to Greece past a Tuesday deadline, calling the threat to cut it off “blackmail.” But he gave no concrete indications that he had made any concessions that would cause them to change their minds.
Greece has been locked in tense negotiations with its creditors for months about the extent of the painful reforms it must make to continue receiving the rescue funds that keep the nation’s finances afloat. Tsipras threw the discussions into disarray early Saturday when he called for a national referendum about whether to accept or reject the E.U. terms , which he has said will deal a death blow to the Greek economy.
E.U. finance ministers Saturday said that Tsipras’s decision signaled an effective end to the negotiations, and they met immediately to start discussions about how they would bolster the remainder of the euro system if Greece leaves it.
No nation has left the 18-nation common currency since it was started in 1999, and any exit would bring unpredictable consequences. But E.U. leaders say they are far better prepared to guard against Greece’s exit than they were in 2011 and 2012, when the possibility first arose.