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Wednesday, February 19, 2020

Ahead of vote,Greeks withdraw cash

Greeks pulled their cash out of the banks and stocked up food ahead of an election that many fear will result in the country being forced out of the euro

Written by Reuters | Athens | Published: June 14, 2012 1:05:01 am

Greeks pulled their cash out of the banks and stocked up food ahead of an election on Sunday that many fear will result in the country being forced out of the euro.

Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods,as fears of returning to the drachma were fanned by rumours that a radical leftist leader may win the election. The last published opinion polls showed the conservative New Democracy party,which backs the 130 billion euro ($160 billion) bailout that is keeping Greece afloat,running neck and neck with the leftist SYRIZA party,which wants to cancel the rescue deal. As the election approaches,publishing polls is now legally banned and in the ensuing information vacuum,party officials have been leaking contradictory “secret polls”. On Tuesday,one rumour making the rounds was that SYRIZA was leading by a wide margin.

“This is nonsense,” one reputable Greek pollster said on condition of anonymity. “Our polls show the picture has not changed much since the last polls were published. Parties may be leaking these numbers on purpose to boost their standing.”

The European Union and International Monetary Fund have warned that Greece,which has only enough cash to last for a few weeks,must stick to the conditions of the bailout deal or risk seeing funds cut off.

Fears that Greece will collapse financially and leave the euro have slowly drained Greek banks over the last two years. Central bank figures show that deposits shrank by about 17 per cent,or 35.4 billion euros ($44.4 billion) in 2011 and stood 165.9 billion euros ($208.1 billion) at end-April.

Bankers said the pace was picking up ahead of the vote,with combined daily deposit outflows from the major banks at 500-800 million euros ($625 million to $1 billion) over the past few days,and 10-30 million euros ($12-36 million) at smaller banks.

Retailers said consumers were stocking up on non-perishable food while almost all other goods were seeing a huge drop in sales as cash-strapped Greeks have no money to spare in the country’s fifth year of recession.

Call for Help

* Prime Minister Mariano Rajoy of Spain has appealed to the ECB to buy debt from struggling countries,while Italy’s Prime Minister,Mario Monti,said Europe needed “credible” measures to promote growth

* Greece,heading into a Sunday election which could lead to it leaving the euro zone,has about $2.5 billion to pay salaries and pensions until July 20,a report said on Wednesday

* Germany on Wednesday told Italians that they must keep taking Prime Minister Mario Monti’s tough economic medicine to avoid becoming the next victim of the euro zone debt crisis

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