Greeks Withdraw $1 Billion a Day as they Await for Decisive Vote
June 13, 2012
REUTERS | JUNE 13, 2012
Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger 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 rumors 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 rumor 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 pollster said there was some consolidation, with voters turning to New Democracy and Syriza from smaller parties but the pool of undecided voters remained unusually large so close to the election and the result was impossible to predict.
Both parties say they want Greece to remain in the single currency but Syriza has pledged to scrap the bailout agreement signed in March which has imposed some of the toughest austerity measures seen in Europe in decades.
The European Union and International Monetary Funds 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.
Euro Or Drachma Dilemma
New Democracy has been telling voters they must choose between the euro or the drachma, while Syriza promises to end the austerity measures imposed by Greece’s international lenders, such as salary and pension cuts, that have driven many Greeks into abject poverty.
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 percent, 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.
“This includes cash withdrawals, wire transfers and investments into money market funds, German Bonds, U.S. Treasuries and EIB bonds,” said one banker, who spoke on condition of anonymity.
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.
“People are terrified by the prospect of returning to the drachma and some believe it’s good to fill their cupboard with food products,” said Vassilis Korkidis, head of the ESEE retail federation.
“It’s over the top, we must not panic. Filling the cupboard with food doesn’t mean we will escape the crisis,” he said.
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