Eurozone deal won time, says Greece

Should calm citizens who feared imposition of capital controls

ATHENS: Greece’s left-wing government insisted on Saturday it had avoided being “strangled” by the euro zone, which agreed in principle to extend a financial rescue deal as nervous savers pulled huge sums from Greek banks.

Athens said the deal, struck late on Friday in Brussels, should calm Greeks who had feared capital controls might be imposed as a prelude to leaving the euro. But some weary voters questioned what their new leaders had achieved in weeks of testy exchanges with euro zone hardliners led by EU paymaster Germany.

After often ill-tempered negotiations, Greece secured a four-month extension to euro zone funding, which will avert bankruptcy and a euro exit, provided it comes up with promises of economic reforms by Monday.

“We won time,” said government spokesman Gabriel Sakellaridis. “The Greek economy and the Greek government weren’t strangled, as was perhaps the original political plan by centres abroad and within the country,” he added, without naming the euro zone hawks who forced the government into a climb-down at the Brussels talks.



Prime Minister Alexis Tsipras has won wide support at home for what Greeks see as their leaders finally getting tough instead of going to Brussels cap in hand and taking orders from Berlin. But it was also under intense pressure at home.

About 1 billion euros flooded out of Greek bank accounts, according to a senior banker, due to savers’ fears that the talks would fail and Athens might have to halt such withdrawals or prepare to reintroduce a national currency.

This added to an estimated 20 billion euros ($23 billion) that Greeks have withdrawn since December, when it became clear that the radical Syriza party of Tsipras was likely to win power in last month’s parliamentary elections.

Faced with the risk of a chaotic bank run on Tuesday after a long holiday weekend, Finance Minister Yanis Varoufakis stressed that the deal should calm savers.

“It is quite clear that the reason why we had a deposit flight was because every day, even before we were elected, Greeks were being told that if we were elected and we stayed in power for more than just a few days the ATMs will cease functioning,” he said. “Today’s decision puts an end to this fear, to the scaremongering.”

Seeking to calm Greeks worried about Monday’s public holiday, a source at the European Central Bank said after the Brussels deal that capital controls were out of the question. 

Published in The Express Tribune, February 22^nd, 2015.

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