Skip to comments.Anxious Greeks Emptying Their Bank Accounts
Posted on 12/06/2011 9:57:51 AM PST by kcvl
Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending -- and are inadvertently making the recession even worse.
Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament.
With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn't managing to recover from a recession that has gone on for three years now: "Our banking system lacks the scope to finance growth."
He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled 237.7 billion -- by the end of 2011, they had fallen by 49 billion. Since then, the decline has been gaining momentum. Savings fell by a further 5.4 billion in September and by an estimated 8.5 billion in October -- the biggest monthly outflow of funds since the start of the debt crisis in late 2009.
The raid on bank accounts stems from deep uncertainty in Greek households which culminated in early November during the political turmoil that followed the announcement by then-Prime Minister Georgios Papandreou of a referendum on the second Greek bailout package.
(Excerpt) Read more at spiegel.de ...
A slow motion bank run, with out the hype. The results will be the same of course, empty banks at some point will not be able to barrow on deposits, GAME OVER!!!
Ah, the withdrawl of ones own money is listed as “the raid on the banks.” There’s no end to the sense of entitlement in a fascist pig.
I can’t say I blame them for wanting to take out their cash, but this is NOT a good thing and will only compound their problems.
We'll never save that old Parthenon and Loan!
Maybe, but so would a bank holiday, ala Argentina. Frankly, they’re up a creek either way. So are we, actually.
It may compound the problems of the MANY, but at least each individual will have THEIR cash. I guess in socialist countries, I guess that collective good concept only goes so far.
Why would anyone keep their money in a bank when failure of the entire system is inevitable? Unfortunately, this is coming to a neighborhood near all of us. Our congress is certainly whistling past the graveyard.
They are trying to withdraw it before the government and the EU steal it; however, it’s too late and they are toast!
If it can get worse, the Greeks will find a way to do it.
They are either
A) Spending their savings on paycheck-to-paycheck items
B) Converting their euro’s to something they can later trade with, i.e. gold, US bonds, etc.
You take your euros out of the bank and hold them. When they go back to the drachma your money in the bank is devalued, where you can still hold the stronger euro (relatively speaking.). I would buy gold or silver or dollars. Of curse dollars ain’t going to be worth much down the road later.
In one article I believe I read last week on Free Republic, an economist said that Europe has about ten days left. It’s a short enough time span for me to wait and watch. ;-)
There is a lesson to be learned in all this. That is, get your money out while the gettin is good. Obammy and Co will certainly try to take our assets and 401ks when SS runs out and grandma doesnt have her monthly check.
one euro in the hand today may be worth 1 millon drachma in the bush next year
They might also fear a trick the Mexican govt pulled on their people in the '70s. They seized all their citizens' US dollar bank accounts and converted them to pesos at the prevailing rate. Next they devalued the peso 1,000 to 1, then told the account holders they could convert back to US dollars. Small wonder the Mexicans to this day, prefer to deal keep little money in the banks.
So . . . I half expect the Greeks to do the same with a Euro/Drachma conversion.
I agree with everything you just said. Way to go!
Yeah. Instant gratification, in a perverse sense.
How can you totally escape a national sales tax, national property tax, etc. Even if you have gold bars in your private safe, we could still be screwed. Scares the —— out of me.