Greeks withdraw $900 million from banks in single day
Action spurred by fears that Greece will leave euro to return to drachma
In a sign of increasing economic uncertainty, Greeks withdrew almost
$900 million in a single day, fearing their country could crash out of
the euro currency to return to the drachma by this week. Political
leaders in Athens came together to discuss emergency government measures
to deal with the run on banks.
In a sign of increasing economic uncertainty, Greeks withdrew almost $900 million in a single day, fearing their country could crash out of the euro currency to return to the drachma by this week.
President Karolos Papoulias warned of "great fear that could develop into a panic," the minutes of Papoulias' negotiations with political leaders showed. Reuters also reported that the minutes also revealed Papoulias was warned by George Provopoulos, head of the country's central bank, that savers withdrew at least 700 million euros or $894 million at the beginning of this week.
"Withdrawals and outflows by 4:00 p.m. when I called him exceeded 600 million euros and reached 700 million euros," the president said according to the minutes of the meeting. "He expects total outflows of about 800 million euros."
In spite of the dire news, there was no sign of panic or queues at bank branches in Athens this week. In addition, bankers dismissed suggestions that a bank run was looming. "There is no bank run, no queues or panic. The situation is better than I expected. The amount of deposit withdrawals the president mentioned referred to three days, not one," A senior executive at a large Greek bank said.
Many Greeks are taking no risks. An Athens private medical clinic receptionist originally from Ohio, told msnbc.com that she had withdrawn 85 per cent of "what's left" in her bank account.
"We could have a new currency in a couple of days and nobody knows for sure what will happen," she said. "There are no lines to withdraw money, but maybe that's because many Greeks have precious little left in the bank. Many have been surviving on [$500] 400 euros a month, which has to cover tax, bills, food and medical costs." She says she plans to return to the United States amid the economic turmoil.
Greeks have already been withdrawing their savings from banks at a rapid pace. Nearly a third of bank deposits were withdrawn between January 2010 and March 2012, reducing total Greek household and business deposits to 165 billion euros.
The political vacuum in Greece has hindered the country's chances of making the budget cuts required by the European bailout deal. Without more austerity measures, the flow of bailout money will dry up, raising the prospect of a euro exit with all its wider ramifications.
The "Grexit," as dubbed by commentators - is now so high that even political leaders committed to avoid it admit preparations are under way.
Asked in an interview whether Greece could leave the euro zone, IMF director Christine Lagarde replied: "We certainly don't hope so, from the IMF point of view ... but we have to be technically prepared for anything."
© 2012, Distributed by NEWS CONSORTIUM.
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: Greece, run on banks, drachma, euros
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