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The debt crisis intensified this weekend in Greece. Capital controls were the short-term answer.
Here's a quick rundown of how Greek officials reached that decision:
- Friday, Greek Prime Minister Alexi Tsipras called for a referendum on terms of a new bailout deal, asking for an extension of the existing bailout terms.
- Saturday afternoon, Eurozone ministers refused to extend existing bailout terms beyond Tuesday.
- Saturday night, Greece's parliament backed a plan for a July 5 referendum.
- Sunday afternoon, the European Central Bank said it will not increase emergency assistance to Greece.
What all that means is that the debt-ridden Mediterranean country is set to miss a 1.55 billion euro ($1.73 billion) payment due Tuesday to the International Monetary Fund, a key Greek creditor.
It also means that a Greek default on Tuesday makes an exit from the 19-member Eurozone a very likely possibility.
In a move to prevent a countrywide collapse, Greek officials have closed banks in the cash-strapped country this week, with capital controls in place. CNBC reported Monday that banks will open Thursday, July 2. Banks were originally to stay shuttered until July 7.
In a sign of the contagion fears that are already rippling across Europe, Macedonia's central bank ordered all of its banks to pull their deposits from Greece.
Residents have been lining up to withdraw money from cash machines. Many Greeks have been emptying their bank accounts for months.
While the National Bank of Greece (NYSE ADR: NBG) said it is making "huge efforts" to keep cash machines stocked, a maximum daily withdrawal amount is in place.
It is part of the Greece capital controls, declared after a meeting on Sunday with the NBG and the country's financial stability board.
So what are Greece's capital controls?
A Breakdown of the Greece Capital Controls
In short, Greece's capital controls restrict the amount of money people can withdraw from banks.
Here's a deeper look at what these controls actually mean…