One of my friends woke up very early this Wednesday morning. In fact, she was not able to enjoy a deep refreshing sleep all night. In reality she hasn’t slept well since more than a week. When the Cypriot banks closed their doors to customers due to the crisis. My friend had all her savings in one of these banks in a branch of suburb in Athens. This morning she swallowed her coffee in a rush and left for the bank. She was there before the bank opened its door. And she was not alone. Other customers had already formed a waiting line. When she reached the cashier, she asked to have all her savings at hand. She plans to hide the money somewhere in her home.
“I won’t give them a single euro, I don’t trust them,” my friend shouted. She complained a bit for having to miss the interest she would get from her bank deposit. But currently, she has lost all trust at the banks. Even if she has much much less than 100,000 euro and her deposit was hardly at risk to undergo a haircut. Even if Greek finance minister Yiannis Stournaras had repeatedly assured bank customers that deposits in Cypriot bank branches in Greece would not have to pay the bank levy.
I couldn’t persuade her that her savings were save as the bank was acquired by a Greek bank and that keeping the few thousands euro at home could bear the risk of been stolen.
“No, No, No way! I need to calm down first,” she said and ended our phone conversation.
Last year, when the Greek crisis was at its peak, my friend had even considered to move her money to Cyprus to rescue it from a potential collapse of the Greek banks and the … Troika.
Nowadays she more than happy that she didn’t do that.
Like my friend, thousands of worried savers and businessmen rushed to the Cypriot banks in Greece this Wednesday, the first day they opened after an 8-day pause.
Greek media report of businessmen who first of all checked whether there money in deposits were still in full. Others tried to have cheques paid out.
Deposits of 15 billion euro are in the three Cypriot banks – Bank of Cyprus, Cyprus Popular Bank, Hellenic Bank- that were acquired by Piraeus Bank on Thursday for 524 million euro.
I assume also other small savers like my friend withdrew all the money out of irrational fear and a week they spent in …hell.
It’s the psychology that counts after all and not the logical arguments or the bank directors’ and ministers’ assurances.
Someone I knew used to say, “it is not what is, but what appears to be”.
I’ll add one of my own, “Eurogroup, where arrogance overcomes intelligence.”