Greek bank deposits reached a 10-year low in February as the outflow continues due to the impasse in negotiations between Athens and creditors and the looming threat of a Grexit.
According to figures released Thursday by the Bank of Greece, deposits dropped by 5 percent as depositors withdrew 7.6 billion euros during the month, leaving total private sector deposits at 140.5 billion euros, or 14.5 percent less than end-November levels. That was the lowest level since March 2005.
In the past three months, Greek households and businesses withdrew a total 23.8 billion euros from the banking system, or 15 percent of the total deposit base. Outflow had slowed down after the February 20th bailout extension deal between Greece and creditors, but it has picked up again in the past week.
Greece has until Monday to present a comprehensive list of reforms to lenders for further financial aid to be released. The Emergency Liquidity Assistance (ELA) scheme controlled by the European Central Bank will help Greece stay afloat short-term.
“What we’re likely to see over the course of the next few weeks is still the drip-feed of liquidity,” Janet Henry, chief European economist at HSBC Holdings told Bloomberg . “We could get more of the ELA, that’s essential to keep the banking system afloat; they could give Greece a bit of leeway to announce its reform proposals, give it some easy wins that it can implement in the next week or two.”
On Wednesday, the ECB made a little over 1 billion euros of ELA available to Greek lenders, its latest move to defer a financial meltdown. That raised the limit to just over 71 billion euros. The increase on Wednesday leaves Greek banks with about 3 billion euros to supply the country’s ATMs.