ATHENS – Fearful of a stalemated June 17th election and worried over giving up the euro and returning to the ancient drachma, frantic Greeks in the days leading up to the polls took out more than $1.25 billion a day from their accounts, but were blocked from making larger withdrawals, saying as it would take two to three days for transactions to clear.
The uncertainty over who will win and whether anti-austerity parties would prevail, a step that could push Greece out of the Eurozone, had Greeks yanking out as much as they could from banks, who told customers that bigger withdrawals would take several days or even extend into next week and after the elections, the newspaper Kathimerini reported. Some customers opted for foreign bonds, mutual funds, foreign currency and foreign stocks.
Bank officials said that since the first of May, six days before a first ballot was stalemated with no party able to gain enough support to form a government, Greeks have been withdrawing at least $126 million a day, and often more than $1.25 billion. Greek banks, already weakened by 74 percent losses imposed by a former shaky hybrid government of the New Democracy Conservatives and PASOK Socialists who backed austerity measures demanded by international lenders, had to get a $24 billion cash injection from the European Central Bank worked through the Greek central bank emergency liquidity fund. A day after the May 6 elections, so much money has been taken out that officials feared a run on the banks and many ATM’s were empty.
To prevent a recurrence and limit any sense of panic, banks are working overtime to keep ATM’s full, and officials said they would make sure the machines were full of cash over the weekend, including the day of the election. Warnings from New Democracy leader Antonis Samaras that a victory by his chief rival at the polls, the anti-austerity Coalition of the Radical Left (SYRIZA), could lead to a return to the drachma and nationalization of the banks have spurred many Greeks to clean out their accounts, with reports that many are stuffing the money under their mattresses or trying to open foreign bank accounts.
The worries have triggered foreign banks in to having contingency plans already in place if the elections fail to create a government or panic sets in. The New York Times reported that big international banks have special teams on standby if the results of the Greek elections shake world stock markets on June 18. “As clients get nervous, banks have been guiding clients on how to react to a range of situations, from just one country leaving the Eurozone to the dissolution of the euro itself,” the paper reported.
Greece is surviving on a first bailout of $152 billion from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is withholding much of a second for $173 billion until the elections results are in and it is determined whether Greece sticks to the reforms or, as SYRIZA leader Alexis Tsipras has vowed to do, renegotiates the conditions or reneges.
(Sources: Kathimerini, New York Times)
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