Greeks are living in fear of the banks collapsing, which would lead to severe haircuts on their deposits. However, they are fuelling this panic and make expensive purchases using their debit cards since the daily withdrawal limit is 60 euros.
From expensive phones and sunglasses, to even more expensive home appliances, such as ovens and refrigerators, Greeks are preparing themselves to face a possible financial collapse of Greece and its banking system.
According to the New York Times, a jeweler in Greece rejected a 1-million-euro purchase because he felt safer holding on to the merchandise than having to deposit the money in a Greek bank. Furthermore, the same article noted that some Greeks have even prepaid their taxes in order to be prepared in case their savings are cut or even lost during a banking system failure.
“I have a huge number of customers wanting to file their taxes right here, right now, to have the tax calculated and paid instantly before a possible haircut. Even if the tax is 40 to 50 thousand euros, they pay it off in one go,” said accountant Antonis Mouzakis from Athens to the newspaper.
The Greek government needs to provide its creditors with a viable reform plan, which will contain harsh austerity measures, by Sunday, July 12, in order to receive the financial support needed to keep the country afloat and in the Eurozone. Among the Greek government proposals was a 3-year bailout program that has not yet been fully formed in regards to fiscal reforms.
The Euro Summit scheduled for this Sunday may be Greece’s last chance to reach an agreement with its creditors and avoid a Grexit and return to the drachma.