ATHENS, Greece—Greeks finally saw their banks reopen at 8 a.m. local time (0500 GMT) on Monday morning, but many restrictions on transactions, including cash withdrawals, remained.
Also, many goods and services have become more expensive as a result of a rise in value-added tax (VAT) approved by Parliament last Thursday, among the first batch of austerity measures demanded by Greece’s creditors.
The parliament also agreed to deep reforms in the pension system, including a gradual phasing out of all early retirement options.
In a decree published on Saturday, the Greek government kept the daily cash withdrawal limit at €60 ($65), but added a weekly limit. For example, a depositor who doesn’t withdraw cash on Monday can withdraw €120 ($130) on Tuesday, and so on, up to €420 ($455) a week.
Bank customers were still not be able to cash checks, only deposit them into their accounts, and were not be able to get cash abroad with their credit or cash cards, only to make purchases. There were also restrictions on opening new accounts or activating dormant ones.
The decree also pushed back by a month, to August 26, the deadline for filing income tax returns.
The decree came on the same day as Greece’s coalition government swore in its new, reshuffled cabinet. Five prominent dissidents from the radical left Syriza party, the senior coalition party, were replaced. Four of them had voted against the agreement with Greece’s creditors on Thursday and the fifth had resigned before the vote.
The most urgent business for the reshuffled government was to pass another batch of austerity measures by Wednesday or early Thursday.
Among the goods that Greeks found more expensive on Monday morning were some meats, coffee, tea, cooking oils other than olive oil, cocoa, vinegar, salt, flowers, firewood, fertilizer, insecticides, sanitary towels and condoms. All these will see the VAT rise from 13 percent to 23 percent.
Services whose VAT also went up from 13 percent to 23 percent include restaurants and cafés, funeral parlors, taxis, cramming and tutorial schools—very popular with Greek students who want to make up for the deficiencies of the school system—language institutes and computer learning centers. Public transport fares were expected to rise early next month. Greece closed its banks beginning June 29 to prevent a bank run after the European Central Bank (ECB) did not increase emergency funding as Greece’s second bailout expired. After the Greek Parliament passed an agreement on Thursday to seek a third bailout, the ECB raised its emergency funding to the cash-strapped Greek banks.
Also, on Friday, the European Union decided to release a short-term loan of €7.16 billion ($7.75 billion) to help Greece pay back a loan due on Monday to the ECB, plus arrears owed to the International Monetary Fund.