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Are They About To Confiscate Money From Bank Accounts In Greece Just Like They Did In Cyprus?

Tyler Durden's picture




 

Submitted by Michael Snyder via The Economic Collapse blog,

Do you remember what happened when Cyprus decided to defy the EU?  In the end, the entire banking system of the nation collapsed and money was confiscated from private bank accounts.  Well, the nation of Greece is now approaching a similar endgame.  At this point, the Greek government has not received any money from the EU or the IMF since August 2014As you can imagine, that means that Greek government accounts are just about bone dry.

The new Greek government continues to insist that it will never “violate its anti-austerity mandate”, but the screws are tightening.  Right now the unemployment rate in Greece is over 25 percent and the banking system is on the verge of collapse.  It isn’t going to take much to set off a panic, and when it does happen there are already rumors that the EU plans to confiscate money from private bank accounts just like they did in Cyprus.

Throughout this entire multi-year crisis, things have never been this dire for the Greek government.  In fact, Greece came this close to defaulting on a loan payment to the IMF back on May 12th.  And with essentially no money remaining at all, the Greek government is supposed to make several large payments in the weeks ahead

Athens barely made its latest payment (May 12) to the International Monetary Fund (IMF), and it managed to do so only when the government discovered that it could use a reserve account it wasn’t aware of, according to the Greek media.

 

Kathimerini, a Greek daily newspaper, reports that Prime Minister Alexis Tsipras wrote to the IMF’s Christine Lagarde warning that Greece would not be able to make that May payment, worth €762 million ($871 million, £554.2 million).

 

Pension and civil-servant pay packets are due at the end of the month, and based on this news Athens may struggle to pay them. Even if it does manage that, on June 5 the country owes another €305 million to the IMF.

 

In the two weeks following June 5 there are another three payments, bringing the June total to the IMF to over €1.5 billion.

The Germans and the other financial hawks in the EU are counting on these looming payment deadlines to force Greece into a deal.

Meanwhile, Greek banks also find themselves in very hot water.  Many of them are almost totally out of collateral, and without outside intervention some of them could start collapsing within weeks.  The following comes from Bloomberg

Greek banks are running short on the collateral they need to stay alive, a crisis that could help force Prime Minister Alexis Tsipras’s hand after weeks of brinkmanship with creditors.

 

As deposits flee the financial system, lenders use collateral parked at the Greek central bank to tap more and more emergency liquidity every week. In a worst-case scenario, that lifeline will be maxed out within three weeks, pushing banks toward insolvency, some economists say.

 

“The point where collateral is exhausted is likely to be near,” JPMorgan Chase Bank analysts Malcolm Barr and David Mackie wrote in a note to clients May 15. “Pressures on central government cash flow, pressures on the banking system, and the political timetable are all converging on late May-early June.”

If no agreement is reached, by this time next month Greece could be plunging into a Cyprus-style crisis or worse.

And if that does happen, there are already rumblings that a “Cyprus-style solution” will be imposed.  Just consider what James Turk recently told King World News

The troika of the EU, ECB and IMF have not yet pulled the plug on the Greek banks, but the following quote in the Financial Times from this weekend should be a warning to anyone who still has money on deposit in that country: “The idea of a “Cyprus-like” presentation to Greek authorities has gained traction among some eurozone finance ministers, according to one official involved in the talks.”

 

The ECB is up to its eyeballs swimming in unpayable Greek debt that it holds. The ECB is not going to take a loss on this Greek paper on its books. Because Greece does not have the financial capacity to repay what is now about €112 billion of credit exposure to Greece on the ECB’s books, the ECB has only two alternatives.

 

It can push the €112 billion of Greek debt it holds to the national central banks of the Eurozone and on to the backs of the taxpayers in those countries, which it politically untenable. Or it can confiscate depositor money in Greek banks, like it did in Cyprus and as the FT has now reported.

Needless to say, such a move would be likely to set off financial panic all over Europe.

Could we actually see such a thing?

Well, let’s recall that back in April we already saw the Greek government forcibly grab “idle” cash from the bank accounts of regional governments and pension funds.  The following is from a Bloomberg report about that event…

Running out of other options, Greek Prime Minister Alexis Tsipras ordered local governments and central government entities to move their cash balances to the central bank for investment in short-term state debt.

 

The decree to confiscate reserves held in commercial banks and transfer them to the Bank of Greece could raise as much as 2 billion euros ($2.15 billion), according to two people familiar with the decision. The money is needed to pay salaries and pensions at the end of the month, the people said.

 

“It is a politically and institutionally unacceptable decision,” Giorgos Patoulis, mayor of the city of Marousi and president of the Central Union of Municipalities and Communities of Greece, said in a statement on Monday.“No government to date has dared to touch the money of municipalities.”

Grabbing cash from the bank accounts of private citizens is just one step farther.

And what happened in Cyprus just a couple of years ago is still fresh in the minds of most Greeks.  That is why so many of them have been pulling money out of the banks in recent weeks.  The following comes from Wolf Richter

Greeks remember very well what happened in Cyprus in 2013, when local banks were given a big thumbs-up from Europe to help themselves to their depositors’ accounts. Cyprus and Greece are very closely tied, and many Greeks consider the island a “sister-nation.”

 

What little trust remained in banks in Greece died that day. People have been nervously looking for signs something similar may happen again in their home country.

 

And they resolved to act at the first sign of danger: banks cannot confiscate money you have under your mattress. Cash can be hidden away.

Let’s certainly hope that what happened in Cyprus does not happen in Greece.

But right now, both sides are counting on the other side to fold.

The Germans believe that at some point the economic and financial pain will become so immense that it will force the new Greek government to give in to their demands.

The Greeks believe that the threat of a full blown European financial crisis will cause the Germans to back down at the last moment.

So what if they are both wrong?

What if both sides are fully prepared to stand their ground and take us over the cliff and into disaster?

For a long time I have been warning that a great financial crisis is coming to Europe.

This could be the spark that sets it off.

 

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Wed, 05/20/2015 - 01:16 | 6112508 fukidontknow
fukidontknow's picture

There's money in bank accounts in Greece?

Wed, 05/20/2015 - 01:19 | 6112511 MonetaryApostate
MonetaryApostate's picture

Lol probably not, but the more important thing you should realize here is...

The elite plan to do it to ALL BANK ACCOUNTS SOON!!!

 

I've been warning people it's coming, but nobody is listening...

http://galeinnes.blogspot.com/2014/07/avoiding-financial-terrorism.html

Wed, 05/20/2015 - 18:58 | 6114866 free shit plz
free shit plz's picture

Despite recent unwarranted attacks on zerohedge directed at Michael Snyder and his religious views, I want to thank and congratulate zerohedge for being one of the few alternative media to publish writers who hold views similar to Mine and Snyders'.

Sadly, immoralism is so strong these days that expressing such truths as:

"We believe that a final judgment will take place for all those who have rejected Christ. They will be judged for their sin and cast into the lake of fire. "

... induce unprovoked attacks from those who live a lie.

Thankyou zerohedge for having balls.

For those among you who seek salvation and heaven, Michaels other websites are an abundant source of information:

http://whatdoesthebiblesayabout.com/archives/what-do-we-believe-our-stat...

http://theeconomiccollapseblog.com/the-most-important-thing

http://thetruthwins.com/archives/44-reasons-why-evolution-is-just-a-fair...

http://thetruthwins.com/archives/does-a-belief-in-evolution-lead-to-racism

Thu, 05/21/2015 - 02:53 | 6116337 Seeing Red
Seeing Red's picture

What specifically does "rejecting Christ" mean?  In my case, I believe he was a very important historical figure but (unlike most Christians) not The-Son-of-God, rather I think he is/was exactly what he SAID he was according to the BIBLE (oops, or is that book ... suddenly ... not "historically accurate"?).  FYI, I don't claim my views are the "truth"; please enlighten me on how YOU were able to establish that rather lofty distinction.  Also, why is organized religion _required_ for moral behavior?  I hear that a lot from Bible-thumpers and the logic escapes me.  What I see are members of different religions trying to kill each other in their spare time.  It's sad when they succeed.

p.s.  I'm not "seek[ing] salvation and heaven".  I'd gladly settle for permanent separation from true believers like yourself.  And perhaps a constitutional goverment ... with separation of church and state.

p.p.s.  Clearly I'm a terrorist given my non-creationist views.  For example I would retort (to Michael's dubious comments that transitional species [or evidence thereof] has never been found/witnessed) that God suddenly creating a new species out of thin air has never been objectively witnessed (or is that just a ... "matter-of-faith" issue?).

p.p.p.s.  You don't have to be a Christian to have a doomer attitude.  But apparently it helps ....

Thu, 05/21/2015 - 05:54 | 6116543 free shit plz
free shit plz's picture

Have fun surfing the lake of fire dude, though it's not too late.

Thu, 05/21/2015 - 09:40 | 6116989 Seeing Red
Thu, 05/21/2015 - 22:00 | 6119241 free shit plz
free shit plz's picture

Pardon me for not watching the whole video, seen one crass attempt at deriding creationism with jokes rather than facts, seen them all.

I did however get to see the very first bit about black holes and thought it odd that you would use this particular video, which comes straight out of the block with an article of scientific faith- black holes.

You have assumed that I am scientifically illiterate, I'm not. In fact, besides my profession of chemistry, I am deeply interested in astrophysics, as I wish to know more about God's creation. Your assumption is wrong, as are any NDTyson fanboys who think they have the universe worked out after watching a fantasticated documentary series by a 'scientist' who spends more time in front of a camera than in study.

Anyway, back to black holes, forever a highly contentious subject within the scientific community, unbeknownst to most mythbuster science fanboys of course who only research enough to get the consensus opinion, and nowhere near enough to weigh the evidence (and accept we are not omniscient). Now, at this point you might be confused, consensus opinion... but we have proven it, there is no more debate, we have the pictures!!

Unfortunately, no. Astrophysics is more theoretical than absolute. You would know this if you read any astrophysics work from even just 30 years ago- Hawking's Brief History of Time has been so meticulously discredited since its publication to render it almost complete fiction, don't believe me, ask Hawking himself.

Black holes are no exception. Despite spurious claims by scientists (whose black hole research funding would be significantly cut were they to contend they don't exist) that we have observed and photographed black holes, black holes are not observable by their very nature. The science behind them is ENTIRELY THEORETICAL.

Sure, you can find dozens of blogs from funding dependent scientists refuting the "non-consensus opinion" that black hole can't exist, but all they are doing is parroting the consensus opinion. Using that logic, in a bygone era the earth WAS flat because the majority of scientists said so, right?

Now here is where our disagreement gets semantical. Neither of us can prove our theory of whether black holes exist, I rely on priests and you rely on scientists, neither of whom can prove anything. So, if science is not absolute, and science is by definition NOT ABSOLUTE (science is never finished right?), then it is a religion like other belief based ideologies.

So, science = religion.

That black holes exist, is an article of faith on your part, reinforced by exalted individuals known as scientists, who don't agree and preach differing unproven beliefs.

So, scientists = priests.

Believe me?

Sat, 05/23/2015 - 10:41 | 6123971 Seeing Red
Seeing Red's picture

I appreciate your having taken the time with the long reply, but the answer is NO.  You presume my opinions are purely concensus-driven for starters.  You are correct that Science doesn't equate to absolute Truth, but neither does a 1690 year old book.  Science, however, does continuously spiral closer to the truth over time; that's what makes it so interesting.  Sure there are political and personality issues, but are you telling me Christianity has FEWER of those?  Please.  Did the Church invent computers?  Why not if they're the only ones who know The Truth about physics?

Amusingly, I see creationists making one "crass attempt" (your phrase) after another to "deride" Evolution, which is an extremely elegant theory (not hypothesis -- know the difference) with massive amounts of evidence supporting it (I have yet to see a successful "attempt").  Questioning the existence of black holes is very odd; haven't seen that before.

Have fun with your Death Cult.

Sat, 05/23/2015 - 18:16 | 6125385 free shit plz
free shit plz's picture

You presume my opinions are purely concensus-driven for starters.

Care to tell us what research, other than reading another person's validation of the scientific consensus, you have conducted to arrive at the same opinion as those on the consensus bandwagon? Knowing how much time and effort one must put into researching any field of science to make an informed hypothesis of their own, and knowing you thought it wise to use that video for your argument, I do presume your ideas are consensus-driven, you can easily prove me wrong by evincing me of your adequate research (tip: 30 mins of google detective work won't cut it), I won't hold my breath though and think it is adorable that you won't accept you have taken the authority of higher powers as truth.

Sun, 05/24/2015 - 03:52 | 6125441 Seeing Red
Seeing Red's picture

I have my own ideas on advanced physics which I've hinted at in other posts; not at all consensus, plus I have an original hypothesis regarding quantum entanglement as to the information transfer mechanism (and it's quite specific).  Now, many of my views ARE what you call "consensus" simply because I have no counter-evidence and I have no conceptual problems with the structure (I have plenty of respect for the great minds that put together our present knowledge of physics).  However, the more one gets into advanced physics, the more my ideas start to veer away in some respects (so your jabs at Stephen Hawking [et al] are meaningless to me).  No offense, but I'm not going to divulge more.

Also, whether I'm on the "consensus bandwagon" has very little to do with whether the consensus is correct, so I find your yardstick very strange.  You seem to be accusing me of following the herd regarding "the truth" when I don't claim science is that, whereas I see you as following the herd in your faith and DECIDING what is "the truth" based on that.  Project much?

Science is mostly about figuring out rules that describe and predict physical behavior.  What exactly is your problem with that?

There is really nothing I can say that will dent your cranium, but try to see the POV of someone who simply doesn't buy into your particular book-o-truth, particularly when it's been obviously edited by humans (take a decent college-level Bible Study course for info), and likely entirely written by humans as well for various purposes.  Of course some of it may well be true, but that doesn't justify mindless Bible-thumping (you can do that all you want as far as I'm concerned, but it doesn't impress [such rants always come across as brain-washed just like the folks who come to my door], and I tend to occasionally post comments to this effect).  However, it would be rather sad if everyone believed the same thing, so I wish you the best (honest!), although I'm very anti-proselytizing (which might explain my post behavior).  I'm also a fan of critical thinking, but obviously no expert.

BTW, the video was not presented as an "argument", but as (pointed) "humor".  Read the post.  BTW, how DO people explain fossils in your particular belief system (see the rest of the video for context -- it's short)?

Tue, 05/26/2015 - 16:32 | 6133601 free shit plz
free shit plz's picture

No offense, but I'm not going to divulge more.

So you don't wish to illustrate the fact that you have done more than just swallow the consensus mantra? As it would require half a sentence to inform me of your extra work I will just presume my first presumption was spot on the mark, as it is with most NDTyson fanboys.

I have plenty of respect for the great minds that put together our present knowledge of physics

Exactly my point thank you. (and btw it is not our knowledge, it is their theories, science yeah?)

Bonus question: If you inhabited the Earth when the 'great minds' decreed the Earth flat and at the center of the universe, would you have respect for their theories and accept them or would you have questioned them? Food for thought, if you will allow it.

Wed, 05/27/2015 - 00:37 | 6134993 Seeing Red
Seeing Red's picture

Your BS is grating; this is my last post on this thread.  How does an original idea (that raises eyebrows) equate to concensus?  Why am I a "NDTyson fan" when I've never seen one of his shows?  I'm now realize trying to have an intelligent conversation with you is hopeless.  What the hell is your problem with science?  It is the basic for our technology you know -- like the computer you're using.  How do you explain that if it's so faulty?  Should peer review be a church function on your planet?  You should be sent back in time to the dark ages where you belong.  Sheesh.

Wed, 05/20/2015 - 06:38 | 6112814 karutzar
karutzar's picture

Not at all. But there is tavern accounts where the money is defacto

The Ethiopian gypsies must get out of the taverns and go to work. Something they dislike notably... lol

Wed, 05/20/2015 - 08:35 | 6112979 Arnold
Arnold's picture

I saw a VLCC listed on Craigs List,

Lightly used, well maintained, would make a good water cistern.

Wed, 05/20/2015 - 10:47 | 6113451 BuddyEffed
BuddyEffed's picture

This Greece fire is hard to put out.   You can't just pour water on it.

Wed, 05/20/2015 - 01:24 | 6112517 Kreditanstalt
Kreditanstalt's picture

The Troika should take the hit.

Failing that, anyone silly enough to still have money on deposit in a Greek bank - LENDING money to them! - probably should take a haircut...better that than the innocent population being made to pay.

Wed, 05/20/2015 - 01:30 | 6112526 F0ster
F0ster's picture

Anyone who keeps cash in any bank today is a fool. The laws have been rewritten. That's NOT your money.

Wed, 05/20/2015 - 01:33 | 6112531 Soul Glow
Soul Glow's picture

YV isn't playing game theory tho lolz

Wed, 05/20/2015 - 02:30 | 6112574 cwsuisse
cwsuisse's picture

In Cyprus the "confiscation" affected accounts holding more than 100.000.- Euros at banks that were classified as completely or partially insolvent. In the mass media the measure was justified with "hitting the Russians". The Russians mostly managed to escape by emptying their accounts through Moscow-based bank subs. Instead many EU pensioners living on Cyprus, particularly from the UK, lost their pensions. The EU publicly promised to never do it again (because no oligarchs in other EU countries). In Greece the situation is fundamentally different. There are neither Russian oligarchs nor wealthy UK pensioners. Divide the current Greek deposits by the population and the average account holds only about 10.000 Euros per head. This figure does not reflect the deposits of companies or interbank accounts which have to be subtracted. In order to avoid a bank-run in Europe the 100.000 threshold would most likely by exempt from confiscation. It is highly unlikely that after month, even years of mental preparation, individuals and companies continue to hold more than 100.000 Euros per bank on account. A confiscation above the threshold would not generate any meaningful amounts. The lemon had been already pressed - there is no more to extract. 

Wed, 05/20/2015 - 08:32 | 6112983 chubbar
chubbar's picture

I hope that they do confiscate those accounts. As outlined above, it's unlikely that they would yield much in terms of amount of money. However, a confiscation would certainly prove that Cyprus was not a one off event. What would this do to the Italian and Spanish mindset? I posit that a confiscation in Greece would set off a contagion in these countries of folks removing money from the banking system. Now, perhaps it would just be those relative few that have accounts in excess of 100K (assuming that was the limit in Greece), but the confiscation would most certainly unveil the program for Italy and Spain. 

Yes, I hope that they go that route because it would shine a very bright light on the mindset and the authoritarian control of the EU.

Wed, 05/20/2015 - 09:11 | 6113107 Billy O'Naire
Billy O'Naire's picture

You're assuming the threshold will be €100k.

That's not law - it was an arbitrary figure.

As the problems become more desperate, the desperate will do more desperate things.

The point is confiscation - if €100k confiscates nothing, then why do it?

The threshold will be set at a level that makes confiscation worthwhile.

You would hope this doesn't need saying, but let's say it - money in Greek banks is now just return-free risk.

Wed, 05/20/2015 - 11:08 | 6113520 funthea
funthea's picture

Also, remember that the original threshold in Cyprus was not 100k, but 25k. It was raised as to stem the tide of disenfranchised individuals at the lower ranks of society.

I have to believe that either there is a mass conversion into cash that has taken place in Greece, for which you would think would be evidenced the increase in M1 there, or there are a lot of stupid Greeks that just aren't paying attention.

Wed, 05/20/2015 - 02:25 | 6112584 cwsuisse
cwsuisse's picture

What if both sides are fully prepared to stand their ground and take us over the cliff and into disaster?

The EU has no choice but to either commit suicide and accept soon disintegration of the EU or provide new funds to Greece against minor concessions from Tsipras. The concession will be sold to the brain-washed EU population as "great achievement". This is the 99% event. The black swan is the remaining 1%.


Wed, 05/20/2015 - 02:33 | 6112590 bid the soldier...
bid the soldiers shoot's picture

which is it

it (ECB) can confiscate depositor money in Greek banks, like it did in Cyprus

or

Greeks remember very well what happened in Cyprus in 2013, when local banks were given a big thumbs-up from Europe to help themselves to their depositors’ accounts. 

The first is confiscation.  The second asking others to confiscate

The government of Cyprus and the central bank of Cyprus reluctantly went along with the EU's demands, which included robbing Russian depositors of 40% of their savings.

 

I don't think the EU will have the same clout with Greece's central bank or government as it had in Cyprus.

 

Especially when some of us think that Greece and Russia are closer than Helen and Paris in days of yore. 

 

Of course Russia is underwriting the new Greek government.  No doubt, China has gift them plenty and now is waiting for the EU to collapse and European depositors to line up at the doors of the AIIB, not to take money out but to put money in. 

 

There is trouble between Russia and the West and I doubt Putin will miss an opportunity to repay the ECB for Cyprus

 

 


Wed, 05/20/2015 - 03:15 | 6112620 Sanity Bear
Sanity Bear's picture

The ECB is basically increasing Russia's eventual reward for rescuing Greece.

Wed, 05/20/2015 - 03:43 | 6112647 Batman11
Batman11's picture

Legally money is not yours once you have put it in a bank, from a legal point of view you have loaned that money to the bank to do with as they choose.

As long as they remain solvent, you can get that money back again.

With the current generation of globally incompetent bankers you will need to keep your fingers crossed when making deposits.

 

 

Wed, 05/20/2015 - 04:39 | 6112695 HenryHall
HenryHall's picture

It is crucial the public is reminded of that. The Danish public seems to have forgotten it as best we can tell from media reports.

Wed, 05/20/2015 - 04:40 | 6112699 HenryHall
HenryHall's picture

The government should simply allow the Greek banks to go bankrupt. Instead of becoming a partner in their crimes through bail-ins or more bail-outs.

Wed, 05/20/2015 - 05:44 | 6112768 medium giraffe
medium giraffe's picture

Stand and deliver bitches.

Wed, 05/20/2015 - 06:55 | 6112832 q99x2
q99x2's picture

Greece got Russian oligarchs?

Wed, 05/20/2015 - 06:57 | 6112834 escapeefromOZ
escapeefromOZ's picture

I just ound out that Greece will not pay the 5th of June rate due to the IMF . They got no money !

It is and Italian website

http://www.ilfattoquotidiano.it/2015/05/20/grecia-syriza-il-5-giugno-non...

Wed, 05/20/2015 - 07:10 | 6112854 justsayin2u
justsayin2u's picture

Once they limit cash withdrawals confiscation is guaranteed.

Wed, 05/20/2015 - 07:52 | 6112898 Bill of Rights
Bill of Rights's picture

Ha ha what money suckers, if its the 0.03 cents in my checking account you want its the 0.03 cents you can have. Anyone leaving an ample amount of money in a bank or credit union needs their head examined. Bank accounts are for cashing checks and paying bills nothing more.

Wed, 05/20/2015 - 08:29 | 6112974 jakesdad
jakesdad's picture

The idea of a “Cyprus-like” presentation to Greek authorities has gained traction among some eurozone finance ministers"

well, the money's gotta come from somewhere and I somewhat doubt the people who took are are going to be returning their bonuses anytime soon...

Wed, 05/20/2015 - 08:58 | 6113064 nixy
nixy's picture

Didn't know this !

 

http://www.forbes.com/sites/nathanlewis/2013/05/03/the-cyprus-bank-bail-in-is-another-crony-bankster-scam/

 

In principle, depositors are the most senior creditors in a bank. However, that was changed in the 2005 bankruptcy law, which made derivatives liabilities most senior. In other words, derivatives liabilities get paid before all other creditors — certainly before non-crony creditors like depositors.

Wed, 05/20/2015 - 09:07 | 6113088 dojufitz
dojufitz's picture

Well...

 

June 5th is my birthday.....and so much shit happens on that date....I say this day is gonna be a biggy.

Wed, 05/20/2015 - 09:36 | 6113166 shouldvekilledthem
shouldvekilledthem's picture

Bitcoin users are not affected.

Wed, 05/20/2015 - 09:37 | 6113172 joego1
joego1's picture

Pull the pin. What could possibly go wrong?

Wed, 05/20/2015 - 11:10 | 6113529 Johnny_is_alrea...
Johnny_is_already_taken's picture

Im reading about greek iminent default for YEARS... I'm getting bored

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