Greeks line up at ATMs as Tsipras calls vote
Some Greek banks were beginning to limit cash transactions as hundreds of people lined up outside branches and drained cash machines after Prime Minister Alexis Tsipras called a referendum that could decide his country’s fate in the euro.
Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some lenders may not be able to open on Monday unless there was an emergency liquidity injection from the Bank of Greece. A central bank spokesman said it was making efforts to supply money to the system.
Some banks were placing limits in daily bank note and ATM transactions. Yiota Kardogianni, a manager at a branch of Piraeus Bank SA, said cash withdrawals were limited at 3,000 euros ($3,350) daily and ATM withdrawals at 600 euros. Alpha Bank AE had set a daily limit of 5,000 euros for most of its branches since last week.
“I’m here to take my mother’s pension out before the machine runs out of cash,” said Erato Spyropoulou, who was standing in a line of about eight people at one of National Bank of Greece SA’s ATMs. “It’s very worrying what’s happening because people don’t know what they’re being asked to vote for. It’s the last nail in Greece’s coffin.”
Tsipras’s decision to hold a referendum asking people to rule on a proposal to unlock 15.5 billion euros in aid for Greece in return for sales-tax increases and pension reforms came hours before euro-area finance ministers were due to meet for the fifth time within 10 days to discuss the same question.
After withdrawing more than 30 billion euros as the anti- austerity Coalition of the Radical Left, or Syriza, took power, depositors are now reacting to the latest twist in the five- month standoff with European leaders and creditors. One banker said 110 million euros had been withdrawn from his institution as of 11:30 a.m. Athens time on Saturday.
Note Shortage
The European Central Bank has been reviewing liquidity conditions at Greek banks daily in the past week. Banking officials in Athens said they were expecting a shortage of euro notes by as early as Saturday evening. They asked not to be named because of the sensitivity of the matter.
Greek bank deposits by businesses and households fell to 129.9 billion euros in May from 133.7 billion euros the month before, according to data released by Bank of Greece on its website on Thursday.
The Bank of Greece is making every possible effort to supply the financial system with liquidity, a central bank official said on condition of anonymity because he wasn’t authorized to speak on the matter publicly. Officials from National Bank of Greece, Alpha, Piraeus and Eurobank Ergasias SA, the nation’s four biggest banks, all declined to comment.
Capital controls
“Greek legislation allows either the Bank of Greece governor or the finance ministry to impose capital restrictions,” George Saravelos, foreign exchange strategist at Deutsche Bank AG, wrote in a note to clients. “The extent to which this materializes will depend on the ECB decision over the next 48 hours as well as depositor behavior.”
Some branches of Alpha Bank in central Athens that normally open for business on Saturdays remained shut and one carried a sign that it wouldn’t open.
About 100 people had lined up at a Piraeus Bank branch at a central Athens street before it opened. Some said they had waited for about three hours. Once word got out that the bank wouldn’t open, one elderly woman fainted.
As an ambulance pulled by to take her away, others spewed vitriol at everyone from the Greek prime minister to Germany.
“Tsipras said he would turn things around, but things are only going to get worse,” said Stavros, a 61-year-old retired sailor, who was lining up to withdraw his pension. He said he was initially planning to go to the bank on Monday but decided to line up on Saturday when he heard about the government’s referendum plans.
He said he won’t be able to pay his mortgage if the banking system doesn’t open on Monday.
[Bloomberg]
