By Lefteris Papadimas
ATHENS (Reuters) – Greek banks expect long queues yet no major problems when they reopen on Monday for the first time in three weeks, although withdrawals will still be limited & capital controls will remain, senior banking officials said on Sunday.
The cautious reopening of the banks, & an increase in value added tax on restaurant food & public transport from Monday, are aimed at restoring trust inside & outside Greece after an aid-for-reforms deal last week averted bankruptcy.
p>Prime Minister Alexis Tsipras is trying to turn a corner after bailout terms he reluctantly accepted prompted a rebellion in his leftist Syriza party.
He sacked party rebels in a government reshuffle on Friday & is seeking a swift start to talks on the bailout accord with European partners & the IMF before elections which Interior Minister Nikos Voutsis said were likely in September or October.
The government on Saturday issued a decree ordering the lenders to pull up their shutters on Monday after they were closed on June 29 to prevent the system collapsing as withdrawals skyrocketed over worries on Greece's debt crisis.
People line up at an ATM outside an Alpha Bank branch in Athens, Greece July 15, 2015. REUTERS/Yiann …
The head of Greece's banking association Louka Katseli urged Greeks, who will be able to withdraw 420 euros a week at once instead of just 60 euros a day, to put their money back.
"Tomorrow when the banks reopen & normality is restored, let's all assist our economy. If we take our money out of chests & from our homes – where they are not safe in any case – & we deposit them in the banks, we will strengthen the liquidity of the economy," she told Skai television on Sunday.
Sigmar Gabriel, economy minister of Germany, the biggest contributor to eurozone bailouts, said the deal could succeed where previous ones failed because the European Union now emphasizes growth & investment rather than just austerity.
It would depend on reforms being enacted & "convincing the population that this is a path that allows Greece to assert itself rather than becoming a permanent alms-receiver," he said in extracts from a television interview.
French President Francois Hollande, who pushed complex for a deal, said the Greek crisis had weakened Europeans' faith in the European project & revived calls for the creation of a euro zone government.
A street performer plays with a ball at the Constitution (Syntagma) square near the Parliament build …
"What threatens us is not an excess of Europe yet its insufficiency," Hollande wrote in an op-ed in the Journal du Dimanche weekly newspaper.
The deal struck at a euro zone summit last week allowed the European Central Bank to top up emergency credit lines which the Greek banking sector needs to survive.
"The banks are ready to open & we don't expect any major problems on Monday," an official at the Central Bank of Greece told Reuters.
As well as getting a weekly limit instead of a daily one, customers will moreover be able to access their safety deposit boxes & withdraw money without a credit card.
Deposit boxes are not affected by the capital restrictions & clients can therefore take whatever they want from them, bank officials said. But restrictions on transfers abroad & other capital controls remain in place.
"The banks are ready & they will open all their branches on Monday," a senior official at Piraeus Bank <BOPr.AT>, Greece's second-largest bank by assets, told Reuters.
"There might be queues because many people will want to withdraw money from their deposit boxes."
One official at EFG Eurobank <EURBr.AT>, the country's third-largest bank by assets, said the bank was expecting long queues in the first two or three days.
"We might have some minor problems with bank checks that have expired in the last two weeks, yet this is something that the government should decide on," the official said.
Acceptance of the bailout terms that allowed for the banks to reopen marked a turnaround for Tsipras after months of difficult talks & a referendum that rejected a less stringent deal proposed by the lenders. But opinion polls suggest the prime minister's popularity remains high.
The VAT increases that will come into force from Monday are among a series of reforms demanded by creditors, many of whom have expressed doubt the government would keep its promises.
(Additional reporting by Costas Pitas in Athens & Michelle Martin in Berlin; writing by Ingrid Melander; editing by Philippa Fletcher)