Greeks stash cash away, send some money to UK banks
* About 25 pct of Greek bank deposits taken abroad
* Nearly half of money sent abroad goes to Swiss, UK banks
* Finance minister hopes bailout will lure savers back
By George Georgiopoulos
ATHENS, Feb 3 (Reuters) - Where have the billion of euros Greeks have pulled out of their crisis-hit banks gone? Mostly home in cash or into safety deposit boxes rather than abroad.
Finance Minister Evangelos Venizelos told the Greek parliament on Friday that of the 65 billion euros ($85 billion)withdrawn from banks since 2009, only 16 billion euros went abroad.
Fears that Greece may be forced to ditch the euro after a severe debt crisis erupted in late 2009 have prompted Greeks to pull their savings, exacerbating liquidity strains at banks that have since become dependent on central bank funding.
Venizelos said less than 10 percent of the 16 billion funneled abroad had been sent to Switzerland while a bigger chunk, 32 percent, was routed to British banks.
Based on central bank data, the Greek banking system's business and household deposits declined by 35.4 billion euros, or 16.8 percent, last year. They stood at 174.2 billion euros in December -- about 79 percent of gross domestic product (GDP).
Liquidity strains have forced Greek banks to resort to central bank funding, both from the European Central Bank and the Bank of Greece, with borrowing standing at 116 billion euros in December.
The erosion in banks' deposit base is not solely due to capital flight. Austerity measures to repair public finances have caused a protracted recession forcing many Greeks and firms to tap savings to pay bills -- the so-called cash burn.
Bankers say Greeks have also withdrawn cash and stashed it away, including in safety deposit boxes where there has been a marked rise in demand.
Venizelos said he hoped this money would start returning to the system once a second bailout Athens is negotiating with its euro zone partners and the International Monetary Fund (IMF) is put in place, removing the uncertainty hanging over banks.
"It is a pity for it to be stashed away and not return to banks," Venizelos said.
"What we are seeking now ... is to send the message everywhere and mainly to Greek depositors that the banks are secure for good and that the time has come for depositors to return."
- 'Weird Al' Yankovic still trying to wrap head around No. 1 album
- French warplanes search Mali desert for crashed Air Algerie plane |
- Wreckage of Air Algerie plane carrying 116 people found in Mali |
- Crunch time for Gaza truce talks as death toll passes 800 |
- World's oldest joke traced back to 1900 BC