Greece banking shutdown sparks global markets slump

Athens 

World markets tumbled Monday as Greece shut its banks and imposed capital controls to halt a panic-driven run on ATMs, a day before Athens risked defaulting and possibly crashing out of the euro.

 But in a narrow ray of hope, creditors left the door open for a last-ditch debt deal to try and avert a Greek eurozone exit which would raise serious questions about the future of the EU. 

Calling for a compromise, German Chancellor Angela Merkel warned that "if euro fails, Europe fails".

 Global stocks fell, with Frankfurt and Paris losing more than three percent after a slump in Asia, as investors feared a 'Grexit'. The euro steadied after hitting a one-month low under $1.10 on Sunday.

 Athens issued a decree to close banks until July 6 -- the day after a referendum on creditors' bailout proposals -- with a 60-euro ($65) limit on cashpoint withdrawals. Foreign tourists, a vital engine of the Greek economy, will be exempt.

 However, the drastic measures -- designed to protect the banking system against the threat of mass panic - sent Greeks rushing to withdraw their daily allowance.

 Jittery housewives, shoppers and business owners formed long lines at cash machines across Greece on a day dubbed "Black Monday".