Sunday , July 21 2024
Home / News / Economy / Greek Minister: Banks tell savers to bring their money abroad

Greek Minister: Banks tell savers to bring their money abroad

There was this story I heard by a friend. It must have been beginning of February or so. He told me, he was advised by an employee of the bank were he had his savings to withdraw them – take it at home, dig a hole in the garden. I thought it was some kind of bank weirdo or something as I could not believe that a bank employee would indeed make such an advice to a client and thus in a time that a new government was elected, economic instability was raging already for a couple of months and people have been withdrawing their deposits since the previous December.

I didn’t take the story seriously and frankly I had thought it was some kind of propaganda against the then newly elected government. I asked around among other friends to see if they also had been the target of such ‘immoral‘ bank proposals. Immoral in the sense that withdrawing money from the banks of a country that is economically bleeding amid crucial negotiations to save or drown Greece results into further bleeding and more Emergency Liquidity Assistance funds and more panic scenarios about fragile banks and more money withdrawals and more ELA and a vicious circle without end. Some could argue that this is the perfect example of how one/ones can ruin a country by bringing its banks to run out of money.

Anyway, none of my other friends had anything to report in this direction and I forgot the story. I forgot the whole issue thus putting a question mark to what it seemed to be “an isolate incident.”

Labor Minister reveals

I had forgotten my friend’s story until Sunday morning, when Labor Minister Panos Skourletis came to confirm it in a away or another.

Speaking to Mega TV, Panos Skourletis said that there were “reports” coming to the Ministry, claiming that “bank officials following orders by branch directors urge depositors with a respected amount to bring their money abroad, by investing them in mutual funds.” The Labor Minister did not reveal which were the banks doing such practices but he said that the same had happened “before the 2012 elections in view of the option that SYRIZA may win…, before the January elections” and that the same thing keeps happening.

Skourletis and both program presenters agreed that every body knew that. Like a secret that everybody knows about it but no one speaks openly.

Capital flow Nov 2014 – April 2015

In the meantime capital continued to flow out of the banks in a rapid speed. According to report issued May 29th 2015 by the Bank of Greece, €30.6 billion left the banks from November 2014 to April 2015, and that savings deposits in Greek banks were €133.7 billion.

Greeks reportedly keep flocking to the banks and withdraw €100 million or €200 million or even up to €500 million on a daily basis. In April 2015 alone, 4.9 billion euro left the banks and from these the 3.5 billion belonged to households.

Greek money parked in Germany

However not all withdrawn deposits are been hidden under the mattress or in a hole in the garden. Some clever Greeks direct their money into the safe site, that is abroad. German daily Die WELT reported today, that €600 million landed in German banks in the period January-March 2015. “The total of Greeks’ deposits in German banks is €3.billion, a record since 2012,” Die Welt notes.

Other assets went allegedly to Switzerland and some even to Luxemburg in form of “mutual funds” as I recently heard.

Panic makers push depositors to banks

Independently of whether elections are due or not,  every time it is clear that negotiations between Greece and the creditors are stalled, every time that the Grexit scenarios rage, every time that a payment to the IMF is due, or a lawmaker from the opposition would “see” a default,  a credit event or even just capital controls, Greeks rush to the banks and grab their savings.

Characteristic for the situation is a recent example with Nea Dimokratia MP Dora Bakoyiannis. Ten days before the crucial “payment or credit event” to the IMF Bakoyannis told Private ANT1 TV on Monday, May 25th, that

if no agreement is reached by Friday, I am afraid that capital control would be imposed over the weekend as it had happened in Cyprus. People should be aware of what will happen if no agreement,” she had added.

Bakoyannis stressed the need for immediate agreement with the creditors and called on Alexis Tsipras to bring the agreement into the Parliament where “it would be voted by everybody else” – in the sense: if SYRIZA MPs would not vote in favor.

Bakoyiannis statement triggered strong reactions among SYRIZA lawmakers and she was criticized also by some officials of the Nea Dimokratia. A couple of days later, on Tuesday, June 2nd, Bakoyiannis told Skai TV that she had not meant what she said, she was just giving an answer to the government ministers.

I cannot tell you how many million left the Greek banks in the time May 25 – June 5, but what according to recent reports, capital flow from the banks has slowed down to some €100 million per day. Reports of the same day claim capital flow of €450-500 million per day.

A question is, of course, whether the money flees the country, whether it is hidden under the mattress and whether it is been withdrawn to meet obligations like payment of taxes, loans and utilities, cover monthly needs or other expenses like an unexpected health issue.

BTW: I think, it is rather wrong to describe “savings/deposits withdrawal from Greek banks” as “capital flow” –  as many English-speaking economic reporters do. But, whatever.


Check Also

Summer sales kick off in Greece on July 8

Summer sales in Greece kicked off on Monday, July 8 and will last until August …


  1. Giaourti Giaourtaki

    That the money leaves Greece is a hyped media hoax!
    80% of the money stays in Greece, and from the 20% some is still on Greek banks but abroad:
    And no wonder with 1.2 million having no income at all here one can see where the money goes, to friends and family:

  2. <>

    There are also plenty of SYRIZA MPs and even ministers that regularly reinforce the ambiguity on the Greek government readiness to make payments to the creditors, and even advocate “rupture” with them. Some even consider the Greek bank run (more like a “bank jog” at the moment) a strategic move by the Greek government to increase the cost of a potential default for ECB and thus make the creditors more willing to show flexibility.

  3. Abbiamo bisognodi una canzone
    Ma quale canzone fara ?
    Una canzone felice di monstrare che noi
    Le persone che non sono ingannare cosi facilmente sono felici.
    Helmut Lotti – Tiritomba 2003