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Greek debt crisis live: Banks to reopen today as prices for everyday items jump

Greek debt crisis live: Banks to reopen today as prices for everyday items jump - The ongoing financial crisis in Greece has already created lots of troubles for the people living there and things are going to get tougher for the Greeks from today as they will have to pay substantially more for everyday items.

The prices of essential items have jumped up due to increases in value-added tax, a condition imposed on the country by its creditors before the start of the talks on Greece's third bailout in five years.

The increase in VAT pushed up the prices of a long list of items, including fresh and frozen meat, fish, coffee, tea, juices, eggs, sugar, cocoa, rice, flour, dairy products such as ice cream and yoghurt, fertiliser, condoms and toilet paper and even funerals.

The tax increases, from 13 to 23 per cent, will also affect products and services such as processed foods and drinks and dishes served in restaurants and bars. It is expected that the tax increases would bring in $US867 million ($1.1billion) by year-end.

The tax increases were approved the Greek lawmakers on Thursday as part of a package of austerity and reform measures adopted by Greece under pressure from international creditors.

After the approval of the new austerity programme by Greek Parliament, the European Central Bank agreed to allow more emergency funding to flow to banks in the country.

Meanwhile the Greek banks, which were running out of cash and were shut down three weeks ago, are set to reopen today. From Monday, the daily limit will be increased to weekly one, capped at EUR 420 (GBP 291), meaning Greeks will not have to queue every day.

Greece and the IMF are still holding talks over a restructuring of the EUR 320bn debt, saying its current position is "unsustainable". But "a classic haircut" has been ruled out by German Chancellor Angela Merkel.

Merkel, however, added that other forms of relief, such as extending maturities or slashing interest rates, could be considered after finalizing the details of the latest programme.