Cash in recession-batted Greece stored “under the mattress”, as the well-known adage goes, is apparently not returning to bank vaults, but is instead increasingly used to pay for higher tax obligations, the result of a “tax tsunami” in 2016 aimed at meeting third memorandum-mandated fiscal targets.
According to the latest Bank of Greek (BoG) figures, cash reserves calculated as being kept outside the banking and credit system decreased by 6.3 billion euros, a rate that means cash holding kept outside the banking system will increasingly evaporate over the coming years.
In December 2016 deposits kept by households and businesses increased by 2.8 billion euros, with total deposits still totaling a disappointing 121.38 billion euros in the country. Additionally, lending by domestic credit institutions decreased by an annualized 1.5 percent in December, down from a corresponding figure of 1.3 percent in November 2016.
Based on BoG estimates, the total amount of cash in the country outside the banking system dropped from 19.6 billion euros, in 2015, to 13.3 billion euros.
