So the eurogroup finance ministers allegedly discussed also about imposing Capital Controls in Greece. Custom is that nobody speaks openly about Capital Controls in advance, but suddenly sends banks to “holidays” to the increase the surprise effect and prohibit bank runs. However the Belgian Finance Minister could not keep the secret and broke the gentlemen’s omerta.
According to Bloomberg columnist Mark Gilbert, singing bird Johan Van Overtveldt said :
“There were indeed different opinions; not everybody was on the same wave length with respect to capital controls.”
so, in the sense that some were in favor and some not.
Belgian finmin breaks the first rule of Capital Controls Club pic.twitter.com/upT3zT0To1
— MARK GILBERT (@ScouseView) June 22, 2015
The times when it was an absolute taboo to talk about bank run, banks collapse, banks shaking and capital controls are long gone. While still in 2013, violation of this taboo could send one directly to prosecutor, nowadays everybody speaks about this with shameful anticipation as if awaiting for Christmas.
On Monday, even one of powerful Greek bankers talked about it and thus while the important meetings between the Greeks and their creditors were taking place in Brussels.
“Nikolaos Karamouzis, chairman of Greece’s fourth-biggest bank Eurobank, confirmed to BBC that the European Central Bank (ECB) has agreed to keep Greek banks alive today.
But he warned there was a genuine risk of Greek banks being forced to close their doors tomorrow and cease dispensing cash for days, if the Greek government led by Alexis Tsipras fails today to convince eurozone finance ministers and government heads that it is taking credible steps to balance its books.
He said that because of the pace of withdrawals of cash from Greek banks by anxious savers – which he said was running at €700m (£501m) a day – all the banks can only keep going thanks to life-saving loans to them made by the Bank of Greece, with approval of the ECB, under the Emergency Liquidity Assistance (ELA) scheme.
There was a serious risk, he said, that the governing council of the ECB would end ELA, and terminate Greek banks’ full access to the eurosystem payments arrangements, if there was no sign today that Greece is back on a path to solvency.
In that dire eventuality, all the banks would have to cease trading, as soon as tomorrow. And they could only reopen as and when the Greek government passed legislation to restrict cash withdrawals, or introduce capital controls, which – he said – would take days.” (full article BBC)
So now that there is most probably no deal Monday night, Greek banks will close their doors tomorrow Tuesday?
Monday morning, the ECB increased Emergency Liquidity Assistance to the Greek banks at 2 billion euro. The ECB is expected to hold another meeting on Greek ELA later tonight and much will depend on the Euro Leaders Summit results.
ELA is not unlimited and depends on the colateral in form of Greek bonds
Greek media reported that 1.6-1.8 billion euro left Greek banks on Monday, although pre-ordials for deposits withdrawals are at 2 billion euro.
Well… all I can say is Congrats to bankers and finance ministers of the same breed who eat and drink and sit on their warm chairs sponsored by taxpayers’ money and yet do not hesitate to spread fear thus increasing economic instability for the single aim to triple pressure on the Greek government.
PS I am ******* if banks are closed tomorrow. I blew my last 18 euro for pizza, coca cola and cigarettes. Now I have just a 2-euro coin in my purse. But I don’t worry. If capital controls I will be allowed to withdraw 300 euro per day. From any bank account, I suppose, not just from mine 🙂