Greek Banking System on Verge of Collapse - EC Vice-President

The banking system of debt-ridden Greece is on the brink of collapse despite the recent financial rescue announcement, European Commission Vice-President for the Euro and Social Dialogue Valdis Dombrovskis said Wednesday.

BRUSSELS (Sputnik) – Banks in Greece have been closed for two weeks amid a widespread cash withdrawal following the announcement of a national referendum on Greek international creditors’ bailout terms.

“The Greek economy is back in recession, the banking system is on the verge of collapse…,” he told reporters.

Earlier in the day, Greek media reported that the European Central Bank was ready to increase the amount of money Greek banks could borrow under the Emergency Liquidity Assistance program on Thursday, which would allow the financial institutions to reopen on July 20.

On Monday, Eurozone leaders reached an agreement on a third bailout package to Greece, estimated at $95 billion over the next three years, which includes an obligation by the Greek parliament to approve unpopular austerity measures – including pension reforms and VAT increases – by the end of Wednesday.