21st Jul 2019

Greek bank deposits fall despite cash controls

  • Greek's queuing to withdraw their €420 per week, changed from €60 a day (Photo: Eric Maurice)

Greek bank deposits fell by a further €1.4 billion in July, despite the introduction of capital controls which prevent Greeks from withdrawing more than €420 per week.

The figures, published on Thursday (28 August) by the Bank of Greece, reveal that businesses also withdrew €158.3 million in deposits.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The outflows are still, however, far lower than the €7.7 billion withdrawn in June.

Greek business and household deposits now stand at €120.8 billion, around €45 billion lower than at the start of 2015, and are at their lowest level for 12 years. Lower deposit levels make banks more fragile by reducing their capital base.

The cash limit, initially €60 a day, was imposed by Alexis Tsipras’ Syriza government in late June after he unveiled plans to hold a referendum on a bailout offer made by Greece’s EU creditors.

He did it to prevent a full-scale bank run and fears of a Greek euro-exit.

A week earlier, between €4 billion and €5 billion left Greek bank accounts after talks with eurozone finance ministers collapsed.

However, the withdrawal limits themselves fuelled panic, with Greeks fearing the chaos of a currency-switch would wipe out their savings.

The controls are estimated to have cost the Greek economy more than €3 billion in July.

Despite Tsipras agreeing a three-year, €86 billion bailout agreement earlier this month and despite creditors explicitly saying there would be no "bail-in", or private savings confiscations, as in the Cyprus bailout, the €420 limit remains in place.

Individuals are now able to transfer up to €500 per month to a foreign account, while Greek students studying abroad can receive €5,000 per term, however.

As part of the deal, Greece’s banks will be recapitalised before the end of 2015, with €10 billion already made available in an EU co-managed emergency fund.

Meanwhile, the European Central Bank’s emergency liquidity assistance (ELA) programme for Greek banks is now capped at €89.7 billion.

But Estonian central bank governor, Ardo Hansson, a member of the ECB’s governing council, wrote on Wednesday the bailout agreement and gradual easing of capital controls had “helped to increase the confidence of depositors” and that “the volume of ELA has slightly decreased.”

Last week, the ECB lowered the ELA ceiling for Greek banks by €700 million, the first cut since February.

Greek bank deposits hit decade low

Deposits held by Greek banks have fallen to their lowest level in a decade, according to statistics released on Friday by the European Central Bank.


EU goes on holiday as new UK PM arrives This WEEK

Boris Johnson is almost certain to become the UK's next prime minister, and oversee Brexit until the 31 October deadline, as work in the EU bubble is winding down for the summer.

Survey: Half of EU staff 'don't know' ethics rules

Only half of EU staff claim good knowledge of their workplace's ethics rules, while 82 percent of staff at the European Parliament have never attended any ethics trainings, according to a report by the European Court of Auditors.


EU goes on holiday as new UK PM arrives This WEEK

Boris Johnson is almost certain to become the UK's next prime minister, and oversee Brexit until the 31 October deadline, as work in the EU bubble is winding down for the summer.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. EU goes on holiday as new UK PM arrives This WEEK
  2. Survey: Half of EU staff 'don't know' ethics rules
  3. Von der Leyen signals soft touch on migrants, rule of law
  4. Timmermans: von der Leyen will be tough on rule of law
  5. Timmermans trolls 'idiot' Brexit negotiators
  6. Rudderless Europe: Will real Germany please stand up?
  7. PiS & Fidesz claim credit for von der Leyen victory
  8. Von der Leyen faces gender battle for commission posts

Join EUobserver

Support quality EU news

Join us