The
banks in Greece have been closed for six days in a row now,
and Greek citizens were allowed to retire just 60 EUR per day from their bank
accounts. Some banks reopened yesterday, but only to allow pensioners to draw
120 EUR from their bank accounts where their retirement benefits were wired to.
This had led to dramatical situations:
Source:
AFP - The situation is worsening by the minute, and whereas the National Bank
of Greece said last weekend the ‘replenishment of the ATM’s goes smoothly’,
there now is a shortage of 20 EUR notes. This is due to the effect most people
wanted to withdraw the maximal amount of 60 EUR, and the only possible
combination at Greek ATMS (which only contain 20 and 50 EUR notes) is to
withdraw 3 banknotes of 20 EUR. This leads to surrealistic situations where
shops and supermarkets are unable to give their customers change.
Source: Slate.com - The
tension is increasing, and there’s no way the banks will be open again right
after the referendum. The capital control
measures will have to be extended because most people would raid their bank accounts
the minute the banks reopen again. Exactly BY instating capital controls, a
bank run is more likely than ever, as the capital controls imply the cash
simply isn’t there anymore. This was confirmed by senior bankers in Greece,
which confirmed the ATMS would run out of
money by the middle of next week.
Source: Slate.com - The
only possibility to replenish the ATM’s would be to ask the ECB to increase the
Emergency Lending Assistance ceiling from 89B EUR towards 100B EUR. That’s
theoretically a realistic assumption but this will be subject to a) the Greeks
not overwhelmingly voting ‘no’ in the referendum and b) the question if the ECB
wants to play hardball over a 22 year old loan.
According to a German newspaper, the National Bank of
Greece was supposed to repay a final 470M EUR slice of a loan at the end of
June. This money was ‘given’ to Greece in 1993 and should have been paid back
by now. So after defaulting on the IMF payment, Greece has actually also
defaulted on a commitment to the ECB outside of the emergency bailout measures.
So, why would the ECB still
be interested in providing more funds under the Emergency Liquidity Assistance
program if the country’s central bank has already defaulted on an old loan?
That’s why the risk of a
bail-in has become realistic now. Rumor has it there might be a 30% bail-in on deposits above 8.000
EUR. So if you have 50.000 EUR on your account, you’d wake up one morning to
see you only own 37.600 EUR anymore and 12.400 EUR have been robbed from your
account. Never mind the 100.000 EUR guarantee extended by the government, never
mind one has worked hard his entire life to save some cash. One morning you’ll
wake up and a part of it will be gone.
That’s once again a reason
why hard assets are an excellent thing to own – as long as you keep it outside
the financial system because even people who did buy gold but stored it in a
bank’s vault still aren’t able to monetize it now, when they need it the most.
http://www.zerohedge.com/news/2015-07-04/cash-greek-bank-account-poof-it%E2%80%99s-gone
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