Banks Reopen, Taxes Hiked as Greece Seeks to Reboot Economy

Local Editor

Greeks queued outside banks on Monday as they reopened three weeks after closing to stop the system collapsing, the first cautious sign of a return to normal after a deal to start talks on a new package of bailout reforms.

Though, citizens woke up to widespread price hikes as part of a cash-for-reform deal with the country's creditors.

The bank shutdown since June 29 is estimated to have cost Greece's crisis-hit economy 3.0 billion euros [$3.3 billion] in market shortages and export disruption.

Capital controls including a block on key transfers to foreign banks and a ban on the opening of new accounts remain in force, although a daily cash withdrawal limit of 60 euros [$65] had been relaxed.

Moreover, Louka Katseli, the head of Greece's bank association, said Greeks would now be able to withdraw a maximum of 300 euros at once until Friday, when a new weekly limit of 420 euros comes in force.

The government is meanwhile expected to make a 4.2 billion euro payment Monday to the European Central Bank [ECB], made possible by a short-term "bridge" loan of 7.16 billion euros granted by the European Union on Friday.

The loan will also allow the debt-crippled Greek government to make payments to the International Monetary Fund [IMF] outstanding since June.

Greece's left government last week agreed to tough reforms -- including tax hikes, an overhaul of the ailing pension system and privatizations it had previously opposed -- in exchange for a three-year bailout of up to 86 billion euros that it is hoped will stop it crashing out of the Eurozone.

Taxes went up in Greece on a wide range of goods and services on Monday -- everything from sugar and cocoa to taxis and funerals -- from 13 percent to 23 percent.

On the other hand, the tax on medicines, books and newspapers eased from 6.5 percent to 6.0 percent.

Source: News Agencies, Edited by website team