Friday 9 December 2016

Greek banks bleed cash, may close on Monday

George Georgiopoulos

Published 20/06/2015 | 02:30

Russian President Vladimir Putin (L) shakes hands with Greek Prime Minister Alexis Tsipras during a session of the St. Petersburg International Economic Forum 2015 (SPIEF 2015) in St. Petersburg, Russia, June 19, 2015. Greece's debt crisis is a problem for
Russian President Vladimir Putin (L) shakes hands with Greek Prime Minister Alexis Tsipras during a session of the St. Petersburg International Economic Forum 2015 (SPIEF 2015) in St. Petersburg, Russia, June 19, 2015. Greece's debt crisis is a problem for
Customers queue to use an ATM in central Athens yesterday

Greeks pulled more than €1bn out of their banks in a single day, banking sources said yesterday, as the country edged closer to default despite assurances from Prime Minister Alexis Tsipras that the doomsayers are wrong.

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The Greek central bank - which has warned that the country's future in the euro and even the European Union is at risk unless the government strikes a deal with its creditors - tried to calm savers by saying that the banking system remained stable.

Germany, the biggest European contributor to the bailout programmes that have kept Greece afloat for the past five years, insisted yesterday it still wasn't too late for Athens to come to terms with its creditors at the EU and International Monetary Fund (IMF).

Greece is on course to default on a €1.6bn debt repayment it must make to the IMF in less than two weeks unless the creditors resume funding that was halted last August.

With the leftist-led government refusing to accept the creditors' demands for more reform and budget cuts, some anxious Greeks have been emptying their bank accounts, fearing that curbs on withdrawals will be imposed under a capital controls regime, as Cyprus did during a crisis in 2013.

Sources said banks may close on Monday. Policymakers at the European Central Bank, which is keeping the Greek financial system on life support by providing emergency funds, agreed yesterday to raise the amount of cash it provides, a banking source said.

Including the €1bn withdrawn on Thursday, savers have pulled €3bn from Greek banks since talks between Athens and its creditors collapsed at the weekend. That represents about 2.2pc of household and corporate deposits.

The figures were provided by a source on condition of anonymity as the statistics were not yet officially published.

Mr Tsipras played down the gravity of the situation. "All those who are betting on crisis and terror scenarios will be proven wrong," he said in a statement.

"There will be a solution based on respecting EU rules and democracy which would allow Greece to return to growth in the euro."

Mr Tsipras, meeting Russian President Vladimir Putin in St Petersburg, added: "The European Union, which we are part of, should find its way back to its statutory principles: solidarity, democracy, social justice.

"By sticking to policies of austerity, and policies which harm social cohesion, which aggravate the recession, this is impossible."

Greek central bank chief Yannis Stournaras also tried to shore up confidence. "The governor of the Bank of Greece confirms the stability of the banking system, which is fully secured," the bank said in a statement.

Irish Independent

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