Friday 20 October 2017

EU officials mull limits on ATMs if Greece leaves euro

Luke Baker

European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing eurozone capital controls as a worst-case scenario should Athens decide to leave the euro.

EU officials have said the ideas are part of a range of contingency plans. They emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen.

But with increased political uncertainty in Greece following the inconclusive election on May 6 and ahead of a second election on June 17, there is now an increased need to have contingencies in place, the EU sources said.

Meanwhile, with days to go before Sunday's election, which could decide Greece's future in the eurozone, the Spanish deal has been dragged into a campaign being fought largely over the harsh conditions imposed under Greece's own €130bn bailout.

Better

The main Greek parties are claiming that Greece can seek a better deal from Europe for its own rescue after Spain won lenient bailout terms.

The left-wing Syriza party, which has campaigned on a pledge to scrap the Greek bailout and demand better terms, said the Spanish deal proved that austerity had failed.

The discussions on a contingency plan for Greece's exit have taken place in conference calls over the past six weeks, as concerns have grown that SYRIZA may win the second election, increasing the risk that Greece could renege on its EU/IMF bailout and therefore move closer to abandoning the currency.

No decisions have been taken on the calls, but members of the Eurogroup Working Group, which consists of eurozone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, the sources said.

Polls show the vast majority of Greeks want to retain the euro, something that may dissuade Greek politicians from pushing the country too close to the brink.

Irish Independent

Also in Business