Greek banks saw 300 million euros withdrawn on Wednesday, the highest outflow in a single day since February 20 when the four-month bailout extension deal was signed, two Greek bankers told Reuters.
The continuing tension between Athens and international lenders has made Greek depositors anxious, generating massive cash outflows from Greek banks. The fear of a Grexit is looming large as Greece is facing a serious liquidity problem and creditors don’t seem to give Athens any leeway.
Deposit outflows started in December, when snap elections were announced. They continued throughout the elections and the formation of the new leftist government. It is estimated that over 20 billion euros have fled Greek banks since December. Withdrawals slowed down after February 20, when Greece got a bailout extension.
Now they started rising again as Greece is on the verge of running out of funds and euro zone creditors have stopped financial aid.
“The uncertainty over the lack of progress in negotiations and the negative news flow has affected sentiment,” one banker told Reuters. “It’s not a huge amount but the worry is whether this is the start of a trend that could get worse.”
Negotiations between Athens and euro zone lenders have stalled. The Greek government went ahead and voted a bill to tackle the humanitarian crisis, while lenders claimed that they never gave permission for that and signing the bill constitutes a unilateral move, contrary to the February agreement.
Prime Minister Alexis Tsipras is due to meet top European leaders including European Central Bank President Mario Draghi and German Chancellor Angela Merkel on the sidelines of an EU summit in Brussels on Thursday in the hopes of ending the impasse. EU officials claim that Greece must fulfill its obligations before receiving further aid and warn Athens that required reforms have not been implemented yet.
“Under the current climate, with worries of a ‘Grexident,’ savers are unlikely to return cash to the banking system soon. Outflows may continue ahead of this weekend,” said another banker.
In total, Greek banks have borrowed 104.3 billion euros from the ECB and the Bank of Greece until February, a sum equivalent to about 57 percent of the country’s gross domestic product.
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