Fra Guardian
Over in Athens, bankers contacted by the Guardian are expressing grave doubts that lenders will be fully functioning next week. Our correspondent Helena Smith reports
There is almost no ATM in central Athens, as I write, that does not have a huddle of people, cards to the ready, in front of it. This is the beginning of what was meant to be another record year of tourist arrivals and many of those now lining up around cash dispensers are holidaymakers (or journalists as the very heart of the Greek capital has also been taken over by a media circus).
And therein lies the problem: by Monday ATMs will have run out of the very cash Greece so badly needs precisely because demands far outstrips supply and stocks are running out fast. “I have very grave doubts as to whether banks will open on Tuesday and even if they do there will be no cash transactions,” one banker confided. “I have seen directors at the Bank of Greece in a state of panic because our liquidity buffer is being eaten up and without the [bailout] programme there’s no ELA [emergency liquidity assistance]. We are in a real mess.”
With capital controls in place, many fear it could be months before they are fully lifted, with potentially devastating repercussions for the economy.
“The situation is very serious,” the president of the national confederation of Hellenic Commerce Vasillis Korkidis told me earlier. “Now that they are in place capital controls may last for a year. The cap on cash withdrawals will probably be raised (from €60 per day) but other restrictions vould remain in place. We saw what happened to Cyprus where it took two years before controls were lifted.”
As we reported earlier today the Greek finance minister himself said “paper money” had become a problem.
If banks run out of cash before Sunday’s referendum it could have a devastating effect on the “no” vote, analysts say.
“The site of ATMs running out of cash before Sunday would destroy the no vote,” said the prominent political commentatos Aristides Hatzis. “The “yes” would win with a landslide which is why the government is insisting and I think praying that everything will be OK at least until Monday.”
