A man stands outside a 1 euro shop in central Athens. REUTERS/Yiannis Kourtoglou
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Greek banks are set to keep broad cash controls in place for months, until fresh money arrives from Europe and with it a sweeping restructuring, officials believe. Rehabilitating the country's banks poses a difficult question. Should the eurozone take a stake in the lenders, first requiring bondholders and even big depositors to shoulder a loss, or should the bill for fixing the banks instead be added to Greece's debt mountain?The longer it takes, the more critical the banks' condition becomes as a 420 euro ($460) weekly limit on cash withdrawals chokes the economy and borrowers' ability to repay loans.The debate is interlinked with a wrangle over reforms, about Greek sovereignty in the face of European controls and whether the country can recover with ever rising debts that have topped 300 billion euros, far bigger than its economy.Four big banks dominate Greece.There are more than 20 billion euros of such deposits in Greece's four main banks, dwarfing the roughly 3 billion euros of bonds the banks have issued.When Cyprus was bailed out, one of the island's two main banks was closed.
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