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A fiasco? Greece to further ease Capital Controls restrictions

Greece will marginally lift the cash limit on bank account withdrawals and allow the opening of new accounts as part of an incremental easing of capital controls first introduced in 2015.

The new regulations, effective on Sept. 1, will allow individuals to withdraw lump sums of up to 1,800 euros per calendar month, compared to a maximum 840 euro limit every two weeks which existed previously or 60 euro per day. And here begins the problem…

  • 60 x 30 = 1,800 euro
  • 60 x 31 = 1,860 euro
  • 60 x 28 February = 1,680 euro

Opposition parties and economic news media

cried “a fiasco”. They have calculated that with the old “840 euro per two weeks” – 52 years per year – the total amount a bank account holder could withdraw per year was 21,840 euro.

With the new regulation, the total amount per year decreases to 21,600 euro.

The Finance Ministry issued a statement in an effort to put things right. It noted that the old regulation (840 euro/two weeks) is not annulled but that practically the account holder has a ‘penalty’ for every day he withdraws above 1,800 euro.

Anyway, the decision also allows companies and individuals to open new bank accounts, according to a decree from the Finance Ministry published in Greece’s Official Gazette on Thursday.

Greece first imposed capital controls in mid-2015 to stem a flight of cash from its banks at the height of a debt crisis which led to its third financial bailout since 2010.

While capital controls restrict cash withdrawal, more and more Greeks use credit and debit cards or bank transactions for their payments to bypass the cash restrictions as imposed through the capital controls.

I hear, that some Greeks withdraw the monthly amount they are allowed to and then bring it back to the bank. The new deposit is considered as ‘new money’ and it not subject of capital controls.

As the end of the day and after two years of capital controls, except some light changes (easing) the daily withdrawal limit remains at 60 euros. The rest is politics and beans counting.

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4 comments

  1. It appeared that there had even been demonstrations to thank Big Brother for raising the chocolate ration to twenty grammes a week. And only yesterday, he reflected, it had been announced that the ration was to be REDUCED to twenty grammes a week.

  2. @ anon

    +1

    …more and more Greeks use credit and debit cards or bank transactions for their payments to bypass the cash restrictions as imposed through the capital controls.

    Which of course is exactly what the government wants. They can track every card payment, and doubtless have software that will flag up any transaction or series of transactions that they deem suspicious.

    Cash is much harder to track. Which is why governments around the world are pushing for a cashless society. Then they can keep tabs on everyone, and freeze their assets at the click of a mouse.

  3. Eh, who has any money left for withdrawing, anyway ….

  4. I wonder how many people are using cash instead of credit, debit cards? Also are credit card, and debt cards purchases considered “new money”. I see very little upside for a Greek shop owner to accept credit, or debit cards.