Greeks Rush the Banks; Nearly $1 Billion Withdrawn in Past Week
Baku, May 17 (AZERTAC). In Greece, a senior judge is to be put in charge of a caretaker government to run the country until a new General Election on June 17. Questions are growing over whether the country`s finances will last that long. Hundreds of millions of euros have been withdrawn from Greek banks in recent days over fears of a departure from the euro - and return to a devalued drachma. Jonathan Rugman, Channel Four Europe reports.
Political leaders in Athens were due to discuss an emergency government Wednesday to deal with a possible run on banks as it emerged Greeks withdrew almost $900 million in a single day, fearing their country could crash out of the euro currency by the end of the week.
An interim government would take the country through to new elections on June 17, triggered by the collapse on Tuesday of talks to form a coalition between winners of the inconclusive May 6 election.
Greeks are withdrawing euros from banks, apparently afraid of the prospect of rapid devaluation if the country leaves the European single currency and returns to the drachma.
President Karolos Papoulias warned of “great fear that could develop into a panic,” the minutes of Papoulias` negotiations with political leaders showed, according to Reuters.
The minutes also reveal Papoulias was warned by George Provopoulos, head of the country`s central bank, that savers withdrew at least 700 million euros ($894 million) on Monday, Reuters said.
"Withdrawals and outflows by 4:00 p.m. when I called him exceeded 600 million euros and reached 700 million euros," the president said according to the minutes of the meeting. "He expects total outflows of about 800 million euros."
Several banking sources told Reuters similar amounts had also been withdrawn on Tuesday.
Greeks have already been withdrawing their savings from banks at a sharp clip - nearly a third of bank deposits were withdrawn between January 2010 and March 2012, reducing total Greek household and business deposits to 165 billion euros.
A senior bank executive said there had been withdrawals in recent days but there was no sign yet of a panic, as had happened in April 2010 when eight billion euros were withdrawn just before Greece obtained its first foreign bailout.
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