Greeks withdraw cash ahead of cliffhanger vote

ATHENS Wed Jun 13, 2012 12:01pm EDT

A man makes a transaction at an ATM machine outside a bank branch in central Athens May 24, 2012. REUTERS/John Kolesidis

A man makes a transaction at an ATM machine outside a bank branch in central Athens May 24, 2012.

Credit: Reuters/John Kolesidis

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

Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods in case of shortages, as fears of returning to the drachma were fanned by rumors that a radical leftist leader may win the election.

The last published opinion polls showed the conservative New Democracy party, which backs the 130-billion-euro ($160 billion) 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 rumor 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.


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 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 percent, or 35.4 billion euros ($44.4 billion) in 2011 and stood at 165.9 billion euros ($208.1 billion) at end-April.

Bankers said the pace was picking up ahead of the vote, with combined daily deposit outflows from the major banks at 500-800 million euros ($625 million to $1 billion) over the past few days, and 10-30 million euros ($12-36 million) at smaller banks.

"This includes cash withdrawals, wire transfers and investments into money market funds, German Bunds, U.S. 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.

Supermarkets said they did not see a rise in profits as people spend less money. But sales of staples like pasta have gone up.

A generation that suffered the deprivations of the Nazi occupation of Greece has traditionally raided supermarkets ahead of any impeding crisis, for fear people will go hungry. Their children have picked up the habit and are stocking up on basics.

"It's fear that is motivating people," said Anastassia Tzorbatzidou, mother of three, who says she has her shelves full. "When you have kids, it's better to have something."

(Additional reporting by Renee Maltezou and Lefteris Papadimas)

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Comments (4)
mulholland wrote:
Italian banks, French banks, and Spanish banks don’t have a lot of cahs left either. Hurry. 6% capital means the bank only has enough cash for the first six out of a hundred depositors. Everyone else is just S.O.L.

Jun 13, 2012 5:48am EDT  --  Report as abuse
Renox wrote:
Exactly. Take the money as long as you can. Let the Zombie banks collapse!

Jun 13, 2012 6:35am EDT  --  Report as abuse
eddiefresh wrote:
“Parties may be leaking these numbers on purpose to boost their standing.”

And news agencies spin webs of fear to counter leftists gains. SYRIZA does not want Greece to be endlessly shackled by a forced banking recession. Time to take the Troika band aid off.

Jun 13, 2012 7:49am EDT  --  Report as abuse
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