Greece. ‘It’s going to be bad, whatever happens’: Greece on edge as eurozone exit looms
400 M€ A DAY. “Everybody’s doing it,” said Joanna Christofosaki, in front of a Eurobank cash dispenser in the leafy Athens neighbourhood of Kolonaki. “Our friends have all done it. Nobody wants their money to be worthless tomorrow. Nobody wants to be unable to get at it.”
A researcher in the archaeology department at the Academy of Athens, Christofosaki said she knew plenty of people who had “€10,000 somewhere at home” and plenty of others who chose to keep their stash at the office. Was she among them? “If I was, I certainly wouldn’t tell you.”
It was not too hard, in central Athens’ plushest district on Tuesday, to find people worried that the latest breakdown of talks between Greece and its creditors over a new aid-for-reforms deal may have implications for the security – and accessibility – of their savings.
With time fast running out to secure a desperately needed €7.2bn in new rescue funds before the end of the month, when Athens is due to repay €1.5bn in loans to the International Monetary Fund, anxious Greeks have begun withdrawing money from their country’s banks at an unprecedented rate.
Bank deposits have been falling steadily since October and now stand at their lowest level since 2004. Withdrawals in recent weeks have averaged €200-250m a day, but on Monday – after the shock collapse of last-ditch talks between the Greek government and its eurozone and international lenders – withdrawals surged to €400m.
“People are very concerned,” said the owner of a small company who asked not to be named. “I think those who could, have already transferred some money abroad. And lots of others have taken out a few thousand, enough to see them through any immediate crisis. I have.”
Sofia, who runs a boutique in one of Athens’ wealthier suburbs, said she and her husband had €15,000 in a safe in the garage, “just to be sure we’re not caught out.”
Elsewhere, an anonymous car concessionaire confessed to “getting into gold a little bit. Not much. But it’s safe, isn’t it? That’s what they say.”
Nikos Grigoriou, who runs a software consultancy, said the possible introduction of capital controls – as happened two years ago in Cyprus – was the big worry now. “If they fail to reach a deal and Greece defaults, there’ll be a lot of panic. Anything could happen.”
Governments use capital controls to stop banks haemorrhaging deposits and to avert insolvency. They can involve setting ceilings on foreign transfers, taxing particular kinds of withdrawal, performing physical checks at borders – but also limiting cash withdrawals from banks and ATMs.
In Cyprus that limit was set at €300 a day, but many observers believe Greece might well need to set a considerably lower daily limit. “What’s that going to be like – no one allowed to take out more than, I don’t know, €100 a day?” asked Christos Ekonomou, a hairdresser.
As Greece’s choice comes ever more sharply into focus – between opting to stay in the eurozone and experiencing yet more austerity, or defaulting on its repayments and possibly returning to the drachma – some economists have also suggested, as an interim measure, a halfway house parallel currency that would involve government IOU notes and tax credit certificates.
On Tuesday, for every wealthy Kolonaki resident fretting about their cash, there was a less well-off state or company employee convinced it would not come to that. “I’m worried, sure, for my job, my kids, my future. But not about my money at the bank, said Nancy Parlakidi outside the Alpha Bank on Stadiou Street. “That’s the least of my worries right now. The bank’s the safest place for it.”
Withdrawing a couple of €10 notes from the Piraeus Bank near Syntagma Square (“but only so I can go shopping”) Georgios Votskaris, a junior office worker, suggested that “older people and richer people are withdrawing money because they’re frightened.
“First, I’m not frightened, I think there’s going to be a deal. But mainly I don’t really have any money to take out. I’m 33 years old; what kind of savings do you think I could have built up over the past five years?”
At the Eurobank on Voukourestiou Street, Dimitrios Barpakis, a 40-year-old software engineer, said much the same. “I have no money to speak of that I could actually get worried about. I’ve lost a lot of money during this crisis; I’ve had to spend my savings, not put them under the bed. And I think there’ll be a last-minute deal. It’s in no one’s interest for there not to be.”
“It’s going to be bad and it’s going to be hard, whatever happens. No one’s kidding themselves about that,” said Kristina Vongas, a lawyer. But despite deep concerns about the their country’s economic future, few Greeks see any benefits to be had from leaving the eurozone.
A recent opinion poll for the news website Newsit showed as many as 74% of Greeks back the euro – with fully 50% saying they would be prepared to accept “major concessions” by the country’s Syriza-led government if it would help break the deadlock with bailout lenders. “We have to stay in,” said Votskaris. “If we leave, things will only get far, far worse.”
Barpakis concurred: “We should definitely stay in – as long as the eurozone is prepared to be what it really should be, which is to say a genuine union whose members help, not punish, each other.”
Christofosaki, though, while also convinced Greece’s future had to be inside the eurozone, was less sure how things would pan out. “The big problem in this country is a mental one,” she said. Even if we do get concessions and there is a deal, a majority of people don’t really want to reform. Greeks are a recalcitrant lot.”