A further loosening of capital controls in Greece – the only such restriction in the Eurozone – will come as of June 4, following a ministerial decision that remains to be published in the government gazette prior to the date. Specifically, individuals with bank deposits in Greek banks will be able to withdraw up to 5,000 euros a month, up from the 2,300-euro ceiling.
Deposits still affected by capital controls exclude “new cash” deposited in banks’ after a previous such “loosening” last year.
Capital controls were imposed by the Tsipras government late June 2015 in the wake of shambolic negotiations with creditors held over the first half of the year, and in order to prevent a “bank run” after a controversial referendum was announced for early July 2015 on an offer by creditors at the time – which, however, had been withdrawn when the referendum question was drawn up.
According to sources, although the maximum monthly withdrawal sum is deemed as high, give that the average rate of monthly withdrawals per individual depositor now stands at around 1,200 euros, the decision was reportedly taken in order to alleviate uncertainty in the domestic economy from recent political developments in Italy – which have negatively affected Greek bonds and spreads.
Conversely, the decision has significant positive provisions for Greece-based businesses.
