Greek bank shutdown cost economy 3 billion euros – report

ATHENS, Greece – The 3-week shutdown of Greek banks has cost the country’s struggling economy some 3 billion euros ($3.3 billion) not counting lost tourism revenue, a report said Saturday, July 18.

Citing commerce groups, the Kathimerini daily said the retail trade alone had suffered a 600-million-euro loss, with apparel taking the main blow.

Exports also suffered a 240-million-euro hit, the exporters’ association said.

According to the Athens Chamber of Commerce and Industry, some 4,500 containers with raw materials and finished products are blocked at customs.

And with a significant backlog of checks and bills of exchange that cannot be paid, business transactions worth an estimated 6 billion euros have been frozen, the chamber added. (READ: 10 days in the Greek debt crisis)

The bank closure was enacted on June 29, after the radical Greek government rejected austerity demands by its international creditors and called a referendum on the issue that the nation backed by over 61%. (READ: Greek FM resigns in concession to creditors after referendum)

But with the creditors threatening Greece with a eurozone exit, the government was faced with total economic paralysis and had to accept a package of tough fiscal reforms last week. (READ: EU approves emergency loan to Greece)

The bank restrictions did not affect foreign card holders, but the crisis also depressed new bookings at the height of the busy tourist season.

Because of the disruption, the government offered Athens commuters free passage on the city’s public transport network for around two weeks – a measure expected to cost the state budget 10 million euros according to reports.

The European Central Bank on Thursday boosted its lifeline to Greek banks by 900 million euros, and eurozone nations agreed to crucial short-term funding.

In response, the Greek government announced that banks would reopen on Monday, although withdrawals would still be capped at 60 euros a day. – Rappler.com