Loading...
See More

Greeks flee banks as poll looms

Jun 13 2012 13:20 Reuters

Related Articles

Greek unemployment keeps on rising

Europe must toughen up

Greece leftist party's debt-free vision

IMF chief riles Greeks

Summer of discontent beckons

Eurozone economies weaken further

 

Athens - Greeks pulled their cash out of the banks and stocked up with food, ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro.

Bankers said up to €800m were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumours that a radical leftist leader may win the election.

The last published opinion polls showed the conservative New Democracy party, which backs the €130bn bailout that is keeping Greece afloat, running neck and neck with the leftist Syriza party, which wants to cancel the rescue deal.

As the election approaches, publishing polls is now legally banned and in the ensuing information vacuum, party officials have been leaking contradictory "secret polls".

On Tuesday, one rumour making the rounds was that Syriza was leading by a wide margin.

"This is nonsense," one reputable Greek pollster said on condition of anonymity.

"Our polls show the picture has not changed much since the last polls were published. Parties may be leaking these numbers on purpose to boost their standing."

The pollster said there was some consolidation, with voters turning to New Democracy and Syriza from smaller parties, but the pool of undecided voters remained unusually large so close to the election and the result was impossible to predict.

Both parties say they want Greece to remain in the single currency but Syriza has pledged to scrap the bailout agreement signed in March, which has imposed some of the toughest austerity measures seen in Europe in decades.

The European Union and International Monetary Fund have warned that Greece, which has only enough cash to last for a few weeks, must stick to the conditions of the bailout deal or risk seeing funds cut off.

Euro or drachma dilemma

New Democracy has been telling voters they must choose between the euro or the drachma, while Syriza promises to end the austerity measures imposed by Greece's international lenders - such as salary and pension cuts - that have driven many Greeks into abject poverty.

Fears that Greece will collapse financially and leave the euro have slowly drained Greek banks over the last two years. Central bank figures show that deposits shrank by about 17% or €35.4bn in 2011, and stood €165.9bn at end-April.

Bankers said the pace was picking up ahead of the vote, with combined daily deposit outflows from the major banks at €500m - €800m over the past few days, and €10m - €30m at smaller banks.

"This includes cash withdrawals, wire transfers and investments into money market funds, German Bunds, US Treasuries and EIB bonds," said one banker, who spoke on condition of anonymity.

Retailers said consumers were stocking up on non-perishable food while almost all other goods were seeing a huge drop in sales as cash-strapped Greeks have no money to spare in the country's fifth year of recession.

"People are terrified by the prospect of returning to the drachma and some believe it's good to fill their cupboard with food products," said Vassilis Korkidis, head of the ESEE retail federation.

"It's over the top, we must not panic. Filling the cupboard with food doesn't mean we will escape the crisis," he said.

imf  |  eu  |  greece  |  europe debt crisis
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
4 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 
 

Goalkeeper saves five penalties with his FACE!

Nothing, and we mean nothing, will keep goalkeeper Scott Stirling from stopping the ball!

 
 

Men24.com

Hottie of the day: Jesselyn
This invention makes farts smell like chocolate!
11 things men don’t know about their clothes
Hilarious mortal kombat elevator prank!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...