Greece closer to fully lifting capital controls this year

Greece is on its way to fully lifting remaining restrictions on capital transfers this year, the governor of the country’s central bank said on Tuesday.

“We are on a good path for the full lifting of capital controls this year,” Yannis Stournaras, head of the Bank of Greece, told Reuters on the sidelines of an investments conference in Athens.

Athens imposed capital controls in June 2015, when Greece’s government had come to the end of its bailout extension period without agreeing on a further extension with its creditors.

At the time, the European Central Bank decided against further increasing emergency funding for Greek banks, forcing the government to close them for nearly 20 days and restrict money transfers from Greek banks to foreign banks.

Greece also limited cash withdrawals to 60 euros a day to avoid a run on banks and a collapse of the banking system.

The restrictions have been gradually eased since then. The cap on cash withdrawals was fully lifted in October 2018. But limits on money transfers abroad still remain.

Based on a roadmap to ease restrictions, issued in 2017, Greek authorities would need to see growing confidence among depositors and progress with the country’s economic adjustment program for a full lifting of capital controls.

Greece emerged from its third and last bailout in August last year and has been restoring its access to international bond markets. Private-sector deposits have also been slowly returning to its banking system. 

[Reuters]