Greece to see higher taxes, reopened banks

Athens - Greeks on Monday will see substantial increases in their value-added taxes, which was one of the conditions imposed on the country by its creditors before talks would begin on its third bailout in five years.

The tax increases from 13% to 23% apply to products and services such as processed foods and drinks and dishes served in restaurants and bars. A sharp hike in consumer taxes on many Greek islands is also set to take effect Monday.

"Our ouzo and moussaka will unfortunately be more expensive starting Monday," Kostas Sarafis, a waiter at Zorba's taverna under the Acropolis in Athens, said Sunday

The tax increases are forecast to bring in €800m by year's end, Greek financial media said.

Parliament approved them Thursday as part of a package of austerity and reform measures Greece's international creditors required before talks would begin on a new, three-year, 86-billion-euro bailout package the country needs to stave off bankruptcy.

The Greek press on Sunday published lists of the products subject to the hikes in the value-added tax. They include fresh and frozen meat, fish, coffee, tea, juices, eggs, sugar, cocoa, rice, flour, dairy products such as ice cream and yogurt, fertiliser, condoms and toilet paper.

Once the new austerity programme was approved Thursday, the European Central Bank (ECB) on the same day agreed to allow more emergency funding to flow to Greek banks, which were nearly out of cash. As a result, they will reopen Monday after being closed for three weeks.

Their transactions, however, will still be limited. Account holders will be allowed to withdraw up to 420 euros per week. For the past three weeks, depositors have been allowed to take out 60 euros per day after standing in long lines at ATMs.

Restrictions on transfers abroad and other capital controls are staying in place because the banks' financial health remains critical.

Eurozone finance ministers also provided Greece with a €7bn bridging loan so it could meet a €3.5bn loan repayment due Monday to the ECB and limp through the next few weeks until the new bailout is finalised.

Prime Minister Alexis Tsipras said he is not persuaded that the reforms and austerity measures will help his heavily indebted country out of its crisis, but he said his government has no other choice but to implement them in return for the money that will keep Greece afloat.