2015
07/27

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Finance

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Greek bailout referendum: Finance Minister Yanis Varoufakis quits

The European Central Bank said on Monday it was keeping the level of emergency credit to Greek banks unchanged, putting the banks under increasing pressure as they try to cope with cash withdrawals.

The ECB saidin a statement that the credit can onlybeprovided against sufficient collateral. That collateral has been weakened due to the worsening financial situation of Greece.

The decision leaves Greek banks in a stranglehold, as they struggle to replenish cash machines in the coming days.

The ECB says it is monitoring the situation in the financial markets closely and is ready to use all available measures to keep stability in the 19-nation eurozone.

Greece and its membership in Europes joint currency faced an uncertain future,with time pressing for the country to reach a bailout deal with creditors after Greeks resoundingly rejected the notion of more austerity in exchange for aid.

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With Greek banks running out of cash and facing the danger of collapse within days without new aid, the government in Athens is racing against the clock.

In an effort to facilitate negotiations on a new aid program Finance MinisterYanisVaroufakis, who had clashed with European officials in the bailout talks, announced his resignation Monday.

The Greek government named Euclid Tsakalotos as the new finance minister. The 55-year-old economist wasPrime Minister AlexisTsipras lead bailout negotiator in talks that halted last month.

Greece and its creditorswill meet again Tuesday to discuss how to keep the country in the euro. But the two sidesremain far apart on key issues, particularly the notion of debt relief.

The negotiations are complicated for the European creditors by Tsipras triumph in Sundays referendum. More than 61 per cent of Greeks backed his call to vote no to budget cuts the creditors had proposed in return for rescue loans the country needs — even though those proposals were no longer on the table.

The vote was painted by opposition parties and many European officials as one on whether Greece should remain in Europes joint currency. In the aftermath, many officials softened their tone and said talks would resume, though Greeces chance of staying in the euro was looking increasingly shaky.

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The countrys banks remained shut for a sixth working day on Monday as the government tries to limit a drain of deposits despite limits on cash withdrawals at ATMs. The banks will remain shut on Tuesday and Wednesday, as well.

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