Greece banks start plans to fleece depositors

Greece banks start plans to fleece depositors

Sunday's showdown referendum on whether to continue accepting EU bailout terms has big impact on Greek banking.

Citing unnamed sources, the Financial Times is reporting a Cyprus-like “bail-in” recapitalization of Greek banks is being planned for, where depositors could lose at least 30 per cent of their holdings over 8000 euros, as Greek banks are rapidly running out of available funds.  The report cites two “senior Athens bankers” as indicating there is only sufficient cash to keep ATMs operating until mid next week, even with the sharp limitations on withdrawals imposed by the banking system of only 60 euros a day (other than ATM’s under sharp restrictions, banks have been closed since Monday).  Reuters reports a surge in Euro conversions to the “cybercurrency” bitcoin, to evade the countries capital controls and as a way to preserve value and/or move funds out of the country. “When people are trying to move money out of the country and the state is stopping that from taking place, bitcoin is the only way to move any value,” according to Adam Vaziri, a board member of the UK Digital Currency Association, as quoted by Reuters.

The Telegraph quotes Constantine Michalos, head of the Hellenic Chambers of Commerce, on the dire state of the system: “We are reliably informed that the cash reserves of the banks are down to €500m. Anybody who thinks they are going to open again on Tuesday is day-dreaming. The cash would not last an hour.”  While Greek deposits are insured up to 100,000 euros per EU banking rules, the insurance fund has insufficient funds — 3 Billion Euros — to withstand a bank collapse.

Rallies where held all over Greece for Sunday’s referendum on whether to accept creditors terms for additional bailout funds. Polls are indicating a very tight outcome.  The Wall Street Journal cites  a friday poll by Alco of a 41.7% “yes” to 41.1% “no” split on voters intentions.

The European Central Bank (ECB) has not extended the emergency liquidity assistance under a program ended June 30, after negotiations broke down with Athens.  Greek Prime Minister Alexis Tsipras, who claimed a “clear, powerful mandate” after the January elections which brought the leftist anti-austerity party Syriza into power, led the cry for a “no” vote in a televised address on Friday, responding to an IMF warning Thursday that Greece needs 60 Billion Euros to regain financial health. “The IMF report justifies our choice not to accept a deal that bypasses the major issue of debt.”


Like This Post? ... Then Like Our Page :)



Leave a Reply

Your email address will not be published. Required fields are marked *