Signs of normality as banks reopen

Greece reopened its banks and started the process of paying off billions of euros owed to international creditors in the first signs of a return to normality after a deal to agree a new package of bailout reforms.

Customers were queued up outside bank branches open for the first time in three weeks after they were closed to save the system from collapsing under a flood of withdrawals.

Increases in value added tax agreed under the bailout terms also took effect, with VAT on food and public transport jumping to 23% from 13%. The stock market remained closed until further notice. The bank closures were the most visible sign of the crisis that took Greece to the brink of leaving the euro earlier this month, potentially undermining the single European currency.

Their reopening followed Prime Minister Alexis Tsipras’ reluctant acceptance of a tough package of bailout demands from European partners, but a revolt in the ruling Syriza party now threatens the stability of his government and officials say new elections may be held as early as September.

“Things are better than the last few weeks. Thank God we didn’t end up with the drachma!” said 62-year-old pensioner Maria Papadopoulou. “I came to pay bills and my taxes today. Last week I couldn’t and all of this is very tiring for the older people like me.”

Limits on withdrawals will remain, however - at €420 per week instead of €60 per day previously - and payments and wire transfers abroad will still not be possible, a situation German Chancellor Angela Merkel said was “not a normal life” and warranted swift negotiations on a new bailout, expected to be worth up to €86 billion.

“Capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality,” said Louka Katseli, head of the Greek bank association.