Greek officials scrambled over the weekend to prevent the country’s financial system from collapsing in panic, with banks in the eurozone nation staying shut on Monday.
The capital controls, designed to prevent badly needed currency from leaving the country, means account holders are only able to withdraw small amount of money from ATMs and trading on the Greek stock market was also suspended.
The new measures mean nobody in Greece can withdraw more than 60 euros, or $67 from bank machines.
U.S. listed Greek exchange traded fund ‘GREK’, a proxy for the Greek markets, was down a stunning 17 percent, indicating that when markets do open in the country it will be nothing short of sheer panic.
The Greek crisis is the biggest test ever face by the European Union and its leaders. In a phone call on Sunday, President Obama and German Chancellor Angela Merkel agreed to take all steps to try to resolve the crisis without Greece leaving the trading bloc.
Monday’s capital controls, effectively paralyzing the Greek financial system, come as a result of the government’s decision late Friday to pull its negotiators from bailout talks.
Prime Minister Alexis Tsipras categorically rejected a draft proposal from Europe and the International Monetary Fund, yet said he would put it to a vote of the Greek people on July 5th.
Greek officials said late Sunday that both the banks and the stock markets will stay shut until July 6th, the day after the referendum.