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Capital Controls Arrive: Greece Begins Confiscating Deposits Of "Small Debtors"

Tyler Durden's picture




 

Last week, the Greek government issued a decree which called for local governments to transfer excess cash to the central bank so that Athens would be able to pay pensions, salaries, and the IMF. The move is expected to raise as much as €2 billion to help keep the country afloat while the country’s “amateurish, time-wasting gambler” of a FinMin feebly attempts to find some kind of middle ground with his EU counterparts and as PM Tsipras pulls out all the stops including the old EU Summit sideline end-around with Merkel and the wild card energy gas pipeline advance from Gazprom (which may portend the dreaded “Russian pivot").  

If the “temporary” local government reserve sweep constitutes what we have brandedsoft” capital controls, we now have the first evidence that the “hard” variety may have arrived because as Kathimerini reports, Greek debtors are having their deposits seized in lieu of payment. Here’s more:

As the country’s finances reach a critical point, tax authorities have started seizing the deposits of small debtors, Kathimerini understands.

 

No figures were available regarding the new crackdown but cases of debtors targeted included a citizen with a debt of just 200 euros.

 

The bank account of the man in question was frozen and then reopened once it was established that he had paid his dues. In several cases, including that of a citizen with a debt of 24,000 euros, bailiffs are said to have used threats to secure the cash. The initiative comes as efforts to crack down on rich Greeks with tax debts make slow progress.

So there it is: the first indication that Greeks may soon be Cyprus’d. As a reminder, Citi now says capital controls will likely play a part in whatever the “resolution” (if you want to call it that) to the Greek situation turns out to be, barring a best case scenario outcome which seems exceedingly unlikely. As a reminder, here's what happens under "Grimbo":

In theory a run on banks could trigger capital controls tomorrow. 

 

The lack of an agreement would also at some point be associated with capital controls and binding limits on ELA access (ZH: the writing is already on the wall for ELA restrictions as well). Compared to the previous scenario, the capital controls (a mix of bank holidays, deposit withdrawal restrictions, restrictions on external transactions) are likely to be more extensive and longer-lived...

Meanwhile, not every local governor is particularly enthusiastic about turning over reserves to the state. Here's Kathimerini again:

But many local authority leaders stood their ground.

 

The mayor of Aristoteli in Halkidiki, northern Greece, resigned late on Friday, citing personal reasons.

 

According to the controversial decree, local authority reserves will be used to “cover
the state’s urgent needs, amounting to 3 billion euros over the next 15 days.” 
The motion passed with 156 votes from coalition MPs following a furious session in Parliament on Friday night.

 

Tsipras is to meet on Tuesday with Attica Governor Rena Dourou, who was on a visit to the US last week.

 

Last month the Attica Regional Authority donated 80 million euros to the state.

 

Universities also object to the decree and rectors met on the weekend to discuss their response. Technical college directors are to meet Monday.

If the students become restless, it's truly all over.

 

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Sun, 04/26/2015 - 18:27 | 6032328 JR
JR's picture

And lest we forget the G20 Bank Bail-In, Cyprus R Us:

Who Controls the food supply controls the people;

Who controls the energy can control whole continents;

Who controls the money can control the world.

--Henry Kissinger, 1973

As financial blogger Michael Snyder points out, that drop [in the price of oil] could trigger a derivatives payout that could bankrupt the biggest banks. And if the G20’s new “bail-in” rules are formalized,[US] depositors and pensioners could be on the hook.”—Max Keiser, Dec. 11, 2014
Read more at http://www.maxkeiser.com/tag/bail-in/#jDpkctAYTszLH1dl.99

Ellen Brown: “Concerns are growing that we are heading for another banking crisis, one that could be far worse than in 2008.  But this time, there will be no government bailouts. Instead, per the Dodd-Frank Act, bankrupt banks will be confiscating (or “bailing in”) their customers’ deposits.

“That includes local government deposits. The fact that public funds are secured with collateral may not protect them, as explained earlier here. Derivative claims now get paid first in a bank bankruptcy; and derivative losses could be huge, wiping out the collateral for other claims.”
Read more at http://www.maxkeiser.com/tag/bail-in/#jDpkctAYTszLH1dl.99

VIDEO : Confiscation of Bank Deposits, The Derivative Debt | Ellen Brown and James Corbett | Global Research, January 01, 2015

Rather than reining in the massive and risky derivatives casino, the new [G20 Summit] rules, according to Ellen Brown:

prioritize the payment of banks’ derivatives obligations to each other, ahead of everyone else. That includes not only depositors, public and private, but the pension funds that are the target market for the latest bail-in play, called “bail-inable” bonds.

“Bail in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalizes TBTF, since the big banks are kept in business by expropriating the funds of their creditors…. If your taxes go up, you will probably still be able to pay the bills. If your bank account or pension gets wiped out, you could wind up in the street or sharing food with your pets.”

http://www.globalresearch.ca/confiscation-of-bank-deposits-the-derivative-debt/5422403

Sun, 04/26/2015 - 17:59 | 6032241 bombdog
bombdog's picture

This Syriza party must be some kind of controlled opposition as they've done nothing radical at all. Not saying I expected miracles but all they've done is to rename the Troika. What is so wrong with going properly bankrupt and bringing back the Drachma? Nothing, but their new finance minister is complete pussy who ruled out a Grexit before he even got elected. I say either 1) they are controlled opposition or 2) they have planned the grexit and it will be spectacular chess move. I'd bet on 1.

Mon, 04/27/2015 - 04:23 | 6033250 TeaClipper
TeaClipper's picture

The answer to your question lies in why the Greek people are still so addicted to the idea of staying not only in the EU still, but in the Eurozone.

The poor southern European nation that joined the EU were seduced by injections of billions of euro's. You are asking a junkie to give up his drug of choice and scratching your head when you cant figure out why he just cant turn his life around

Sun, 04/26/2015 - 18:04 | 6032258 Clesthenes
Clesthenes's picture

“GOVERNMENT CAN FORCE YOU TO TURN IN YOUR GOLD”

So says “steveharless”.

I’ve got news for you ‘steve…”: when the federal government “seized” American gold, it got 90%-95% that was held by banks… 10% that was held by private individuals.  All it could do about the latter was to forbid courts to enforce gold-based contracts.

Today, Americans are far more aware of the treason perpetrated by their governments.  If there would be a gold seizure, they would get proportionately less than last time… among other unpleasant events, from their perspective, of course.

You see, history repeats itself.  If that’s the case, perhaps you should learn real history.  Otherwise, your remarks are mere babble… attempts at wishful thinking.

Sun, 04/26/2015 - 20:41 | 6032553 essence
essence's picture

First off, I need to state I admire your passion.  Now for some reality.

You're fighting the last war. If the gov doesn't want PMs to gain traction then the obvious choke point today is in the buying & selling of it. All they need to do is put serious roadblocks to that avenue. Come the elimination of cash and their control will be total (all you bitcoin adherents out there, get over it. The gov WILL have visability over the blockchain endpoints of any e-currency that predominates). And it's not like I'm giving them ideas or anything. No doubt they've completely anticipated this already (I would if I was evil and in their shoes).

When I see the (yuck, yuck, wink) jokes from commenters about "losing their PMs in a boating accident" I cringe.

Are folks really that naive?

 

Sun, 04/26/2015 - 18:06 | 6032263 WTFUD
WTFUD's picture

How low do you have to sink before you realise that club membership costs outweigh any benefits to the 95%.

Get a referendum from the people for a full pivot east with the russian missile defense systems and resulting china/russia infrastructure investment build.

Preempt CLUB EU and shake those shackles off for crying out loud. When Soros turns up with an attempted ' lilac revolution ' you'll have all the resources of Vlad to thwart that ambition at your disposal.

Mon, 04/27/2015 - 04:07 | 6033245 TeaClipper
TeaClipper's picture

Going to be tough weening the Greeks off the Euro, They have been bought for years by the EU and have become thoroughly addicted. I fear they still cling desparatly to their drug of choice, and still refuse see reality staring them in the face

Sun, 04/26/2015 - 18:15 | 6032288 ah-ooog-ah
ah-ooog-ah's picture

Popcorn time !

 

I'm ready

I'm ready

ready ready ready ready (spongebob)

Sun, 04/26/2015 - 18:24 | 6032315 Dre4dwolf
Dre4dwolf's picture

Almost everyone in Greece probably will end up owing some kind of taxes.

They sent my aunt a tax bill last year for being too poor, thats actually what the letter said... that she owed 150 Euros for "not making enough money", that being said, this is not really going after private deposits in Greek banks of Greek people its going to target foreign deposits in other currencies because most Greek people probably do not really keep much of anything in private bank accounts anyway.

They are going to try and pull blood from a stone. . . good luck with that.

 

People are delusional if they think even 1% of the money that was lent to Greece ever reached anyone's pocket outside of Govt workers.

 

Sun, 04/26/2015 - 18:25 | 6032316 Kprime
Kprime's picture

If the students become restless, it's truly all over.

 

Seattle high school junior class skips standardized test in protest

http://news.yahoo.com/seattle-high-school-junior-class-skips-standardize...

Sun, 04/26/2015 - 19:19 | 6032441 Jonesy
Jonesy's picture

Yeah right, if I had to bet these same kids would vote for whomever gave them a Whopper, just like they do in Argentina.

Sun, 04/26/2015 - 18:40 | 6032361 TRN
TRN's picture

In Canada we have seizure of bank deposits for unpaid taxes. We don't call them capital controls.

Sun, 04/26/2015 - 18:50 | 6032381 ekm1
ekm1's picture

yes, sir

Sun, 04/26/2015 - 21:59 | 6032374 Youri Carma
Youri Carma's picture

GREECE – WE CAN DO THE MATH NOW, GREEK DEFAULT BY EARLY JUNE/LATE JULY!

11 May 2015 Last change to release €7,000 million/€7 billion from ECB
12 May 2015 €0,774 million IMF

05 June 2015 €0,310 million IMF
12 June 2015 €0,348 million IMF
16 June 2015 €0,581 million IMF
19 June 2015 €0,348 million IMF
30 June 2015 A four-month extension on bailout agreement expires.

13 July 2015 €0,465 million IMF
19 July 2015 €0,199 million ECB Maturity Gov’t Bonds
19 July 2015 €0,104 million ECB Maturity Gov’t Bonds
20 July 2015 €3,500 million ECB Maturity Gov’t Bonds

IMF
12 May 2015 €0,774 million IMF
05 June 2015 €0,310 million IMF
12 June 2015 €0,348 million IMF
16 June 2015 €0,581 million IMF
19 June 2015 €0,348 million IMF
13 July 2015 €0,465 million IMF
___________________________________________+
13 July 2015 €2,709 million ~ €2.7 billion TOTAL

ECB
19 July 2015 €0,199 million ECB Maturity Gov’t Bonds
19 July 2015 €0,104 million ECB Maturity Gov’t Bonds
20 July 2015 €3,500 million ECB Maturity Gov’t Bonds
___________________________________________+
20 July 2015 €3,803 million ECB Maturity ~ €3.8 billion TOTAL

___________________________________________+
___________________________________________+

20 July 2015 €6,512 million ECB Maturity ~ €6.5 billion TOTAL

So Greece needs €6.5 billion by 20 July 2015.

Prime Minister Alexis Tsipras ordered municipalities to transfer funds, estimated at about €1.5 billion, to the central bank.

12 May 2015 €0,774 million IMF
05 June 2015 €0,310 million IMF
12 June 2015 €0,348 million IMF
___________________________________________+
12 June 2015 €1,432 million ~ €1.4 billion IMF TOTAL

16 June 2015 €0,581 million IMF
___________________________________________+
16 June 2015 €2,013 million ~ 2.0 billion IMF TOTAL

Bottoms Up Line: With €1.5 billion they only can make it to 12 June 2015 and by 16 June 2015 they need a total of €2,013 million to the IMF.

So, we savely can make the conclusion from these numbers that by June it’s ‘Game Over’ for Greece and certainly by July cause numbers don’t Lie. And that rhymes;)

Because even if they recieve the €7 billion bailout from the ECB at 11 May 2015 Greece is only 'saved' till 20 July 2015 when €6.5 billion payment is due after which the whole shebang can start again.

Greece owes a total of €324,000 million /€324 billion to the IMF, ECB, and Euro-Zone governments.

SOURCES:

Greece’s Scary Calendar of Debt Payments Due
http://www.bloomberg.com/news/articles/2015-04-23/greece-s-scary-calendar-of-debt-payments-due

The ‘Relentless’ Greek Debt Payment Schedule
http://www.zerohedge.com/news/2015-04-24/relentless-greek-debt-payment-schedule

Greek Payback Math at 0% Interest (MISH'S Global Economic Trend Analysis)

http://globaleconomicanalysis.blogspot.nl/2015/01/greek-payback-math-at-0-interest.html

THE AFTERMATH

If the ECB release the €7 billion, €2.7 billion will go directly to the IMF and the €3.8 billion is a 'free' cigar from ECB's own cigar-box.

Obviously it's the €2.7 billion to the IMF which is bothering the ECB the most since they also know that Greece can default any day now.

In their frantic delusional disparity they ask Greece to do inhuman things which is totally ridiculous.

Dreadful Draghi helped this evil scheme by cutting off Greece's liquidity. Blackmailing them.

Why else would they negotiating in bad faith and try to murder Varoufakis' character by  calling him names and trying to by pass him?

"As a payments squeeze slowly crushes Greece, it is becoming increasingly apparent that its foreign lenders, led by an unbending European Union, are negotiating in bad faith.

In fact, they are not negotiating at all, but simply insisting that an agenda of destructive policies rejected by Greek voters nonetheless be adhered to."

EU’s bad faith in Greek talks exposes true motives http://www.marketwatch.com/story/eus-bad-faith-in-greek-talks-exposes-tr...

Greece's Varoufakis Takes Hammering From Riled EU Ministers http://www.bloomberg.com/news/articles/2015-04-24/varoufakis-said-to-tak...

Isolated in debt talks, Greek finance rebel gets the cold http://www.reuters.com/article/2015/04/25/us-eurozone-greece-varoufakis-...

Eurozone officials seek to bypass Varoufakis to spur Greek talks http://www.ft.com/cms/s/0/ccd73f38-ec2f-11e4-8604-00144feab7de.html

Sun, 04/26/2015 - 19:04 | 6032409 NoWayJose
NoWayJose's picture

Any Greek with more than 100 Euros still in a Greek bank deserves what they get. Any Amerikan with more than $10,000 in a bank in the US deserves what he/she is going to get.

Sun, 04/26/2015 - 19:09 | 6032419 Turk February
Turk February's picture

"... if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair)"

In other words, assume a can opener.

Sun, 04/26/2015 - 19:12 | 6032425 Jonesy
Jonesy's picture

We are now seizing that fake money in order to pretend it is really worth something, even though we made it from nothing before we lent it to you with interest.

Fuck 'em, and any dumb goy stupid enough to keep their "wealth" in paper whose value is determined by the same dicks stealing the worthless shit back today.

Sun, 04/26/2015 - 19:15 | 6032432 Jonesy
Jonesy's picture

The lesson:  Dumbass Greek Goyim could've avoided this theft if they had only invested in the S&P.

Sun, 04/26/2015 - 19:16 | 6032434 Jack Burton
Jack Burton's picture

The IMF and ECB considered that Greece had a liquidity problem and that epic loans were the right path to see Greece through a short term liquidity crunch, when in fact, Greece was totally insolvent. The giant bailout loan sealed Greece's fate, forever in debt, never able to pay down principle, hardly able to meet interest payments. Solution, "gut the economy". Austerity, close hospitals, schools, sell off all income earning Greek assets. Like utilities of all sorts. Sell of Greek national assets, like public lands. These same bankers who gave Greece loans, are now the ones snapping up bargains on Greek land and assets. A perfect plan for 1% wealth transfer, a total bust for 99% of Greeks. When do they finally figure out the rigged game the IMF and ECB, and their illegal Troika Coup Government are playing?

Sun, 04/26/2015 - 22:33 | 6032915 Crocodile
Crocodile's picture

95% of people in the banker shoes would do the exact same thing; it is a human problem; rotten to the core as we continue to witness on a daily basis...nothing new under the sun.

Mon, 04/27/2015 - 10:18 | 6033804 Gohigher
Gohigher's picture

When ?  About the same time as the Americans wake up to the same. 

Gruber-stiltskin, a tale written by the bankers Grimm !

Sun, 04/26/2015 - 20:21 | 6032584 rsnoble
rsnoble's picture

Why wouldn't the students become restless?  I bet they end up making Baltimore look like a fucking cakewalk and rightfully so.

Sun, 04/26/2015 - 20:35 | 6032613 DeliciousSteak
DeliciousSteak's picture

It's no wonder Greeks have had trouble collecting taxes in the past if their methods have been so lax. It took a massive crisis and hopelessness to start updating their procedures to modern standards. I wonder if the Greeks realize that not only are they forced to become northern European, if they were so from the start most of their problems would've been avoided.

Sun, 04/26/2015 - 21:03 | 6032688 Bastiat
Bastiat's picture

I hate the term "Capital Controls"  -- isn't just an enabling euphemism to obscure the plain seizure of private assets by the state?

Sun, 04/26/2015 - 21:05 | 6032695 TRN
TRN's picture

...and the West has engaged in it for a long time. Greece is merely catching up!

Sun, 04/26/2015 - 21:26 | 6032765 Monetas
Monetas's picture

They had plenty of warning .... to withdraw their deposits .... no tears .... from the Tough Love Lobby !

Sun, 04/26/2015 - 21:27 | 6032770 Bunga Bunga
Bunga Bunga's picture

The same happens in the US. When you have tax debt, you can be forced to pay. I am not saying that taxes are always justified, but finally Greek authorities are establishing standards which have been around in civilized countries for a while. 

Sun, 04/26/2015 - 21:38 | 6032794 unemployed
unemployed's picture

Also happens when your lending institution in the US is FDICed.   The new owner tells all debtors,  pay up now...   no more withdrawals,  your credit line is zeroed.

Also happens when you have a HELOC and the bank gets antsy,   they have closed credit lines and drained banks accounts overnight to pay off the HELOC.

Mon, 04/27/2015 - 00:41 | 6033112 Weaponized Innocense
Weaponized Innocense's picture

Oh. Hillary forgot to hit her delete button..... Oops!

Mon, 04/27/2015 - 01:21 | 6033141 Peter K
Peter K's picture

"If the students become restless, it's truly all over."

WTF

I thought this was every "students" dream team government?

What happened?????

Mon, 04/27/2015 - 01:29 | 6033150 Ms No
Ms No's picture

I'm not sure how credible that Economic Collapse blog is but their claiming JPM has puchased over 8 million ounces of silver in last two weeks.

Mon, 04/27/2015 - 02:35 | 6033195 Troy Ounce
Troy Ounce's picture

 

 

Greek Army Wallpaper Of The Month April:

http://www.army.gr/templates/default/images/button_download.gif

For Your Enjoyment.

 

 

 

Mon, 04/27/2015 - 03:17 | 6033215 TRN
TRN's picture

Hey Tyler, Is this a propaganda piece?

Mon, 04/27/2015 - 03:44 | 6033232 Victor999
Victor999's picture

A little late for true capital controls, don't you think?  It is obvious that the Greek government has been moving this direction some time now.  The banks have been experiencing a 'soft run' on their accounts for weeks.  The elite have already preotected themselves whilst the new Greek government is off promising the people that they will do no harm.  In fact, they are in the process of doing great harm to the people.  I expect to see the full implementation of capital controls on non-elite accounts and the theft of private assets by the government in the near future, followed by a government decision ("We have no other choice - we are forced to do so!") to introduce severe austerity controls on the Greek people.  The Troika will kick the can further down the street, milking the people of everything they have.

Next up for the Greeks - Golden Dawn.

Mon, 04/27/2015 - 04:13 | 6033246 GuusjA
GuusjA's picture

Het is duidelijk dat Lodewijk Asscher (PvdA), vice-premier en minister van Sociale Zaken en Werkgelegenheid, nog niet op dezelfde lijn zit als de Griekse minister van financiën Yanis Varoufakis. 

 

http://www.trouw.nl/tr/nl/4504/Economie/article/detail/3982864/2015/04/2...

 

De Duitse minister van financiën Wolfgang Schäuble hintte er al op dat Duitsland zich voorbereidt op een Grieks faillissement. Dit kan wel waar zijn, maar wanneer Yanis Varoufakis de 'Logica van de 1' gaat hanteren om het systeem 'Leven en Laten Leven' in de eurozone erdoorheen te duwen dan zijn ineens de aandeelhouders van de Deutsche Bank hun geld kwijt.

 

http://www.nrc.nl/nieuws/2015/04/27/deutsche-bank-bezuinigt-miljarden-du...

 

Het GELD=ZUURSTOF-paradigma schrijft namelijk voor dat er geen hefboomwerking meer is en staat de rente vast. 

http://nos.nl/artikel/2032408-grieken-speuren-naar-verborgen-miljarden-v...

 

Ook het verschijnsel dat een overheid via Google Earth naar villa’s met zwembaden moet zoeken is natuurlijk met de invoering van het RENTE=BELASTING-plan ook verleden tijd.

Mon, 04/27/2015 - 04:35 | 6033255 GuusjA
GuusjA's picture

Netwerk @SuperWil wil dat de @RaadvanState gaat (h)erkennen dat ze de 'wiskundige definitie van de absolute waarheid' onder de pet houden, om zo het systeem 'Liegen om te Leven' in de lucht te houden.

 

http://www.mintpressnews.com/chomsky-takes-on-mainstream-media-us-warmon...

 

Want zo moeilijk is die definitie niet uit te leggen:

 

https://www.youtube.com/watch?v=E-0ujdgWoBw

Mon, 04/27/2015 - 04:47 | 6033266 Aristofanes
Aristofanes's picture

Mr Durden,

are you lying on purpose or are you ignorant?

The occasional block of small debtor deposits has been happening for the last 3-4 years now.

As to the mayor of the Aristotelis Municipality, you should know better.His resignation is in no relation to the use of Municipailty reserves by the government.You may have heard of a Greek-Canadian company by the name ''Greek Gold''.If not please do your homework.

Mon, 04/27/2015 - 05:40 | 6033288 Debugas
Debugas's picture

one can freeze your bank account but noone can freeze the cash in your pocket

 

BANK RUN is garanteed

Mon, 04/27/2015 - 07:43 | 6033387 Lostinfortwalton
Lostinfortwalton's picture

As I read the article they are seizing the money from bank accounts of people who are behind on their taxes and refuse to pay? Sounds reasonable to me. My father-in-law is Greek and has to bribe the doctors to get the "socialized" medical care. Isn't paying a bribe a form of taxation as well? Maybe the people should be allowed to deduct bribes paid from taxes owed? The whole country is corrupt to the core. The population is intelligent as hell but they prefer to squander their opportunities and destroy their country.

Mon, 04/27/2015 - 08:56 | 6033570 Apocalicious
Apocalicious's picture

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