EU ‘could limit withdrawals from cash machines’ if Greek exit tips eurozone into deeper crisis

Tuesday, June 12, 2012
By Paul Martin

By Adrian Lowery
12 June 2012

European Union officials have discussed measures to stop mass withdrawals from cash machines, a report claimed today, if a Greek exit were to tip the eurozone into a deeper crisis.

Finance officials have also discussed imposing border checks and introducing eurozone capital controls, in order to check a possible flight of funds, according to Reuters news agency.

The officials stressed they did not expect Greece to leave the euro and the ideas were from a range of contingency plans – but the preparations indicate the gravity which EU leaders are attaching to a potential Greek exit.

Greek elections on Sunday could see angry voters back radical left-wing parties opposed to austerity – pushing Athens closer to an exit from the euro.

James Hickman, managing director of Caxton FX, the contingency plan in case Greece drops out of the single currency is ‘hardly surprising’.


While scenes of a Northern-Rock style run with savers queuing outside branches to pull out cash have not emerged, both Spain and Greece have reported substantial increases in money being pulled out of banks – in what has been called a ‘bank jog’.

European Central Bank figures show Greek deposits down by 17 per cent in the year to the end of March 2012, and in the ten days after the 6 May election, savers were reported to have pulled £3bn out of Greek banks.

Meanwhile, figures published by Spain’s central bank showed €97bn was pulled out of the country in the first three months of the year – around a 10th of the country’s GDP.

The slow motion flight of deposits has come as savers and firms worry about not just banks’ safety but also their countries’ continuing membership of the euro.

Greek depositors fearing a Greek exit from the euro – which would see citizens rushing to get hold of their euro deposits – have been pulling billions of euros out of the nation’s banks.

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