Panicking savers in Greece have withdrawn over €3 billion in deposits from the country’s banks between June 15 and June 18 ahead of the Eurogroup meeting where as expected a deal was not reached between Greece and its lenders.
A record €1 billion left Greek banks on Friday, after Luxembourg leaked details of a closed door Eurogroup meeting in which an ECB representative is said to have warned the banks may not be able to open Monday.
The ECB’s decision-making governing council on at a hastily convened conference call on Friday agreed that Greek banks could draw on€3.5 bn of extra funds from an emergency facility. However, it was unclear whether Greece had got the full €3.5bn it was hoping for under the Emergency Liquidity Assistance (ELA) programme, or whether it has been given only enough to see it through until Monday’s meeting of EU leaders.
A spokesman at the ECB declined to comment.
The pressure is on Greek finance minister Yanis Varoufakis to impose capital controls: limiting movement of money outside Greece and limiting cash withdrawals.
Varoufakis believes what’s happening is orchestrated and, combined with Thursday night’s rejection of his three point proposal to end the debt standoff, is part of Europe’s effort to panic the Greek government into surrendering on the terms of a debt deal, to impose more austerity
The ECB has set another meeting for Monday, suggesting that the latest cash injection will only see Greece through the weekend.
Monday is shaping up to be a red-letter day in the five-year old Greek debt drama. The ECB meeting will be followed by yet another gathering of eurozone finance ministers in the afternoon, topped by an emergency summit of European leaders scheduled for the evening.
Greece’s prime minister, Alexis Tsipras, has insisted that only a political deal at the level of heads of state and government can end the crisis. Speaking in Russia on Friday morning, he said Monday’s summit was a positive development on the road towards a deal.
“All those who are betting on crisis and terror scenarios will be proven wrong. There will be a solution based on respecting EU rules and democracy which would allow Greece to return to growth in the euro”
