From Spiegel:
Contrary to earlier assumptions, restrictions on the movement of capital, which could be used to prevent Greek citizens from moving their money abroad (something that would endanger the country's banks), are now seen as being compatible with EU law. Article 143 of the Treaty on the Functioning of the European Union offers a loophole, in that it permits certain countries to "take protective measures."
The new line is not entirely uncontroversial, however. This became apparent at a meeting of the euro zone's deputy finance ministers last Monday, when the so-called troika of the European Commission, European Central Bank and IMF gave its report on the situation in Greece.
The group was divided in the end. For the first time, there was a majority, led by the Germans, Dutch and Finns, that advocated pulling the ripcord on Greece.
The southern countries, including France, were considerably more reserved. They feared that if funds were cut off for Greece, they could be next in line.Can someone please explain to me why so many Greeks still have their euros in a Greek bank? According to the latest official figures since Jan. 2010 Greek bank deposits have only declined by 20%. Assuming these figures are accurate (a big assumption) I would have expected the outflow to be much greater.
Maybe it's difficult to open a bank account in a foreign country.
ReplyDeleteThis is true for Britain and Switzerland, both of which require proof of residence and other information. But how true is this for Greece's neighbors outside of the Eurozone which have strong currencies? For example, Turkey comes to mind.
ReplyDeleteAnd even if someone in Greece couldn't open a bank account in another country like Turkey, at this stage I would be tempted to take my chances with holding cash in a home safe versus waiting to be devalued by 40% or more.
http://www.nytimes.com/2011/09/12/business/returning-greece-to-the-drachma.html?_r=1&scp=1&sq=greece%20portugal&st=cse
In Ireland, depositors have withdrawn 40% of their funds, or double what has been taken out of Greek banks, over the past 18 months:
ReplyDeletehttp://www.bloomberg.com/news/2011-09-13/deposit-flight-from-european-banks-means-collateral-risk-piling-up-at-ecb.html
If you were a Greek, would you deposit your money in Turkey?? I mean, get real. The Turks and the Greeks are enemies, and Turkey is becoming a hard edged Islamic state. The problem for Greeks is how do you open an account in a foreign country? Carrying cash through the Balkans would lead to confiscation, and going to Italy requires a boat trip, and your cash could still be confiscated by Europe's version of the TSA. A plane trip is especially risky in this respect, so Germany is out of the question. Bank accounts must be opened in person so the internet is out of the question also. The best option for Greeks is to withdraw cash, buy gold, and bury it under your basement floor.
ReplyDeleteThe Irish have it a lot easier. They can simply walk into a British bank without leaving Ireland.