Anxious Greek pensioners swarmed closed bank branches Monday in the hope of getting their pensions, while queues formed at ATMs as they gradually began dispensing cash again following the imposition of strict controls on capital.
As global markets plunged following one of the most dramatic weekends in Greece’s five-year financial saga, the country woke up to a changed financial landscape that many in the markets fear could be a prelude to a messy debt default and a damaging Greek exit from the euro.
The banks and the country’s stock market have been closed for the week after Prime Minister Alexis Tsipras’s surprise call for a referendum next Sunday on budget and reform proposals creditors are demanding Greece should take to gain access to blocked bailout funds. Tsipras is advocating Greeks reject the proposals in the popular vote, which increasingly has the look of a vote on euro membership itself.
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The sense of unease was evident in the number of pensioners lining up at bank branches hoping they might open. Many elderly Greeks don’t have bank cards and make withdrawals in person at the till, and so find themselves completely cut off from their money. One of the most onerous controls is a daily limit of $67 (60 euros) on cash withdrawals from ATMs.
‘‘I came here at 4 a.m. because I have to get my pension,’’ said 74-year-old Anastasios Gevelidis, one of about 100 retirees waiting outside the main branch of National Bank of Greece in the country’s second largest city of Thessaloniki.
‘‘I don’t have a card, I don’t know what’s going on, we don’t even have enough money to buy bread,’’ he said. ‘‘Nobody knows anything. A bank employee came out at 8 a.m. and told us ‘you’re not going to get any money,’ but we’re hearing that 70 branches will open.’’
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The finance ministry said the manner in which pensions would be paid would be announced later Monday afternoon.
Deputy Minister of State Terence Quick said special arrangements would be made for pensions, telling private Antenna television that pensions would be dispensed in full as many pensioners don’t have bank cards.
The daily withdrawal limit wouldn’t be enough to cover many basic necessities. ‘‘What can I do first with 60 euros? I owe 150 just to the pharmacy,’’ Gevelidis said.
The capital controls are meant to staunch the flow of money out of Greek banks and spur the country’s creditors to offer concessions before Greece’s international bailout program expires Tuesday.
Without a deal to extend the bailout program, Greece will lose access to the remaining 7.2 billion euros ($8.1 billion) of rescue loans, and is unlikely to be able to meet a 1.6 billion-euro debt repayment to the International Monetary Fund due the same day.
The accelerating crisis has thrown into question Greece’s financial future and continued membership in the 19-nation shared euro currency — and even the 28-country European Union.
Investors around the world are worried that should Greece leave the euro and say it can’t pay its debts, which stand at more than 300 billion euros, the global economic recovery could be derailed and questions would grow over the long-term viability of the euro currency itself.
‘‘The images of queues at ATMs in Greece are stripping traders of what little confidence they have left in the nation, and the financial earthquake that happened in the eurozone over the weekend can be felt around the world,’’ said David Madden, market analyst at IG.
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Among the major markets in Europe, the CAC-40 stock index in France was down 3.6 percent at 4,877 while Germany’s DAX fell 3.5 percent to 11,088.
Aside from developments at the banks in Greece, massive queues formed at gas stations, with worried motorists seeking to fill up their tanks and pay with credit cards while they were still being accepted.
Although credit and cash card transactions have not been restricted, many retailers were not accepting card transactions Monday morning.
Electronic transfers and bill payments are allowed, but only within the country. The government also stressed the controls would not affect foreign tourists, who would have no limits on cash withdrawals with foreign bank cards.
For emergency needs, such as importing medicines or sending remittances abroad, the Greek Treasury was creating a Banking Transactions Approval Committee to examine requests on a case-by-case basis.
Tsipras announced the capital controls in a televised address Sunday night, blaming the eurogroup, the gathering of the eurozone’s finance ministers, and its decision to reject an extension request for the bailout program. He has asked again for the extension to allow for the referendum.
French Finance Minister Michel Sapin said talks with Greece could resume at any time, while Pierre Moscovici, the European commissioner for economic affairs, said negotiations were cut off when an agreement seemed within reach.
The situation now largely rests on a ‘yes’ vote in Greece, Moscovici said.
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The referendum decision, ratified by Parliament after a marathon 13-hour session that ended in the early hours of Sunday, shocked and angered Greece’s European partners. The country’s negotiations with its European creditors have been suspended, with both sides accusing each other of being responsible for talks breaking off.
Greece is dividing into two camps ahead of the referendum. A demonstration is planned in Athens later Monday by those against the proposals from the creditors. Another one is planned for Tuesday by those who want to make sure that Greece’s position in Europe is not threatened.
Tsipras also blamed the European Central Bank’s Sunday decision not to increase the amount of emergency liquidity the lenders could access from the central bank — meaning Greece has no way to replenish fast-diminishing deposits.
‘‘It is now more than clear that this decision has no other aim than to blackmail the will of the Greek people and prevent the smooth democratic process of the referendum,’’ Tsipras said. ‘‘They will not succeed.’’
Oil prices declined and the euro edged down after Athens announced the moves to stanch the flow of money out of Greek banks and pressure creditors to offer concessions before a bailout program expires Tuesday.
Germany’s DAX index tumbled 2.9 percent to 11,161.41 points in early trading and France’s CAC-40 dived 3.4 percent to 4,887.69. Britain’s FTSE 100 dropped 1.6 percent to 6,643.83. Futures augured losses on Wall Street. Dow futures were down 1.1 percent at 17,677.00. S&P 500 futures shed 1.1 percent to 2,073.00.
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Greece’s Cabinet closed banks for six business days and restricted cash withdrawals. The Athens Stock Exchange was due to be closed Monday. That follows Prime Minister Alexis Tsipras’ weekend decision to call a referendum on European and International Monetary Fund proposals for Greek reforms in return for bailout funds.
The accelerating crisis has raised questions about whether Greece might withdraw from the 19-nation euro currency, a move dubbed Grexit.
‘‘Even if a deal is somehow reached, the ability of Greece to implement agreed reforms is doubtful,’’ said IHS Global Insight economist Rajiv Biswas in a report.
Greek withdrawal from the euro could lower Asian economic growth by 0.3 percentage points next year due to disruption in trade and financial markets, Biswas said.
In Asia, the Shanghai Composite Index fell 3.3 percent to 4,053.03 despite China’s surprise weekend interest rate cut. Tokyo’s Nikkei 225 shed 2.9 percent to 20,109.95.
Hong Kong’s Hang Seng fell 2.6 percent to 25,966.98 and Sydney’s S&P/ASX 200 was off 2.2 percent at 5,422.50. Seoul’s Kospi dropped 1.4 percent to 2,060.49 and India’s Sensex declined 1.5 percent to 27,385.05.
The euro slipped to $1.1066 from the previous session’s $1.1168. The dollar declined to 122.96 yen from 123.89 yen.
Globally, Greece’s brinksmanship with its creditors is unlikely to have the impact of the financial panic set off by the collapse of Lehman Bros. in September 2008, economists said.
‘‘Today, the European banks have shed much of their Greek debt and they have significantly increased their capital,’’ said Mark Zandi, chief economist at Moody’s Analytics.
‘‘A Greek default and exit from the euro zone would be devastating to Greece’s economy, but no one else’s,’’ said Zandi. ‘‘So, the Greek standoff will be disconcerting to financial markets, but only temporarily.’’
The European Central Bank has vowed to do whatever it takes to prevent a financial panic.
The ECB is committed to buying 60 billion euros a month in bonds to push down interest rates and help economies that use the euro. It could buy more and flood financial markets with cash to calm jittery investors.
‘‘They stand ready to do whatever it takes,’’ said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics.
China’s rate cut, the fourth since November, appeared to be aimed at reassuring investors after a plunge in share prices last week, rather than boosting economic growth, analysts said.
Beijing cut its benchmark lending rate by 0.25 percentage point and freed up money for lending by lowering the reserves banks are required to hold.
The timing is ‘‘rather market-friendly’’ and appears to be meant to ‘‘provide a support to the market sentiment,’’ said Credit Suisse economists Dong Tao and Weishen Deng in a report.
In energy markets, US benchmark crude declined $1.11 to $58.52 a barrel in electronic trading on the New York Mercantile Exchange. The contract shed 7 cents in the previous session to close at $59.63. Brent crude, used to price international oils, shed $1.24 cents to $62.02 in London.