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Long Lines Expected As Greek Banks Risk "Cautious" Reopening
Now that Greece has legislated away its sovereignty to Germany and enshrined its future as a vassal state of Brussels into law, Greek banks are set to reopen on Monday for the first time since PM Alexis Tsipras’ referendum call triggered a weekend ATM run three weeks ago and forced Athens to impose capital controls and declare a bank "holiday."
The ELA ceiling was subsequently frozen by the ECB which effectively meant the banks would have to hope that incremental daily withdrawals of €60 (the limit under capital controls) would not eat through their cash buffer (which at one point was under €1 billion according to some estimates) before some manner of deal in Brussels prompted the ECB to turn the liquidity drip back on.
Now that the path is largely clear for the commencement of formal bailout discussions and, perhaps more importantly for the short-term liquidity needs of Greek banks, now that a new circular funding scheme has been devised that will allow Greece to make a €3.5 billion payment to Mario Draghi on Monday, the ELA ceiling has been raised and officials in Athens have apparently decided that it’s safe to lift the shutters on the nation’s lenders. Here’s Reuters with more:
Greek banks expect long queues but no major problems when they reopen on Monday for the first time in three weeks, although withdrawals will still be limited and capital controls will remain, senior banking officials said on Sunday.
The cautious reopening of the banks, and an increase in value added tax on restaurant food and public transport from Monday, are aimed at restoring trust inside and outside Greece after an aid-for-reforms deal last week averted bankruptcy.
The government on Saturday issued a decree ordering the lenders to pull up their shutters on Monday after they were closed on June 29 to prevent the system collapsing as withdrawals skyrocketed over worries on Greece's debt crisis.
The head of Greece's banking association Louka Katseli urged Greeks, who will be able to withdraw 420 euros a week at once instead of just 60 euros a day, to put their money back.
"Tomorrow when the banks reopen and normality is restored, let's all help our economy. If we take our money out of chests and from our homes - where they are not safe in any case - and we deposit them in the banks, we will strengthen the liquidity of the economy," she told Skai television on Sunday.
As well as getting a weekly limit instead of a daily one, customers will also be able to access their safety deposit boxes and withdraw money without a credit card.
Deposit boxes are not affected by the capital restrictions and clients can therefore take whatever they want from them, bank officials said. But restrictions on transfers abroad and other capital controls remain in place.
"The banks are ready and they will open all their branches on Monday," a senior official at Piraeus Bank, Greece's second-largest bank by assets, told Reuters.
"There might be queues because many people will want to withdraw money from their deposit boxes."
Well yes and no. Sure, some people "might" be in line to take money out of a safety deposit box, but one has to believe that the majority of those in the queues will be looking to withdraw the €420 weekly limit in case something else goes wrong and brings redenomination risk right back to the fore. Recall what we said in "Don’t Tell Merkel, Greek Banks Need An Additional €10-14 Billion Bailout":
Even if a deal is reached this weekend and the ECB raises the ELA cap, it’s difficult to imagine that the deposit outflows will cease (would you trust your deposits in a Greek bank even with a "deal"?) and if capital controls are lifted, the situation will be even worse because Greeks will simply take the opportunity to withdraw all of their money at once.
Capital controls have not been lifted, but the same principle applies. That is, Greeks are now allowed to withdraw up to €420 at once as opposed to €60 per day so that’s exactly what they’re going to do - hence the expectation of "long queues."
Clearly, this is about managing perception. The only way that €420 per week is different than €60 per day, is that it will front-load the bank queues on Mondays and thus create a false impression of calm throughout the remainder of the week. In other words, it’s all about inertia.
Of course even if this works (i.e. even if effectively confining the bank queues to the first day of the week manages to create a false sense of stability or even manages to stem the outflows), Greek banks need billions in capital, meaning one or more of the following three things needs to happen: i) deposit flows need to reverse, ii) capital needs to be injected, or iii) NPLs need to stop rising. The problem is that "ii" won't work without "i", and "iii" is impossible until the economy turns around, which isn't likely under the terms of the new bailout.
So unfortunately, Greeks should prepare for the long-haul because as we noted in "As A Reminder, This Is What Capital Controls In Cyprus Looked Like," a crisis of confidence is nearly impossible to reverse in the short-term and if there is any place on earth where confidence is in short supply, it's at Greek banks.
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What happens Monday in Greece should be required viewing for everybody in the EU.
Everyone in the USA as well. People still believe they have cash in a bank when it is really a loan. No one in my circumstance can seem to wrap their mind around this.
Miffed
How could this lead to anything except bank runs?
Designed to fail.
Anyone just making deposits? I'm looking for people making deposits only. You can step to the head of the line.
Greece: Operation “mutation of the Left” has started!
Nein Nein Nein Nein, These are no longer Greek banks, they are German banks.
Greek is all rejoice! Capital control is ease from 60 Euro/Day to 42 Euro/Day.
In other news, chocolate ration is increase 5g/day to 20g/week while Oceana is win battle in Eurasia. Smile, big brother is watching over you!
That got a big laugh from me!
I was in a long grocery store line and the next register opened - if you could pay with cash. Suprisingly, I was the only one who moved over.
You are see line, get in line, find out later why is line, but keep you placement.
Today my local bookshop had a down credit card machine. The guy at the counter seemed surprised when I didn't leave after hearing "cash only."
People ‘invest’ when they still have house payments, car payments and paying 20%+ on credit cards waiting on the pool loan.
"Everyone in the USA as well."
A preview of the what the Federal Reserve, Goldman Sachs, JPM, BOA and the rest of the banksters have in store for the masses in the US.
If the bank doesn't give you your money on demand, does that mean you are a slave?
Why yes it does.
How can a bank be considered "open" if you can't withdraw all your money? Greeks, you're screwed. Monday go get your 420 and also drink all their coffee and maybe steal a few computers.
You shoot the bank teller then jovially ask for the manager.
Funny how the banksters and their politician lackeys find the "Ctrl+P" keystrokes to create money from nothing for banks/corporations/insurers (themselves) but never can find them for the "little people".
I guess the Lords and Ladies of the New Aristocracy do need someone to scrub their toilets and cook their food after all; and their goon squads in pretty uniforms with fancy titles to protect their hegemony.
Good thing most of the ones in the lines wont be missing any work.
Maybe some could find employment as an official line holder. This could become a business.
Miffed
Ya but getting the permit will eat up all the profits.
In Greece can you use your Credit Card then pay the balance on line out of your bank account?
and a little bit of in-da-face
So I don't get it. They forced Greece to take out a loan they can't pay to make a payment towards the previous loans they couldn't pay?
What's your endgame on this, guys?
Here is a teachable moment. Welcome to ZH.
At 3 weeks, I didn't know the reason either.
Before the sun sets today, you will know far more about the "endgame" than you ever imagined.
Ok folks, start explaining...
KTC
[as everyone inside was about to go to Potter's bank for money] Now wait...now listen...now listen to me. I beg of you not to do this thing. If Potter gets hold of this Building and Loan, there'll never be another decent house built in this town. He's already got charge of the bank. He's got the bus line. He got the department stores. And now he's after us. Why?
Correction:
"If we take our money out of chests and from our homes - where they are not safe in any case - and we deposit them in the banks, where they are not safe in any case, we will strengthen the liquidity of the economy,"
Is it really possible sombody will make a deposit? Really?
Long lines expected at the food markets too.
As millions buy food and water for uncertain times.
Many Greek police have families in these mobs.
Look out for the Langley boys with sniper riffles.
Clear the rooftops of CIA/Mossad trash.
well this should be fun.....
Oh, man! This is priceless, the funniest thing I've read in ages.
The head of Greece's banking association Louka Katseli urged Greeks, who will be able to withdraw 420 euros a week at once instead of just 60 euros a day, to put their money back.
"Tomorrow when the banks reopen and normality is restored, let's all help our economy. If we take our money out of chests and from our homes - where they are not safe in any case - and we deposit them in the banks, we will strengthen the liquidity of the economy," she told Skai television on Sunday.
BUY FOOD AND WATER!!!!!!!!!!!
PEOPLE ACT ONLY WHEN THE BASICS OF LIFE ARE THREATENED.
VERY HUMAN.
Unless you are out of rope. But if you do then sure.
After the banks open, watch the food markets.
If the shelves are empty, people will get desperate.
Chocolate ration just went up from 60g a day to 420g a week. Double plus good citizen!
Will they double the rations to 840g every two weeks? Sounds very heroic.
Long 'SOUP' Line - RIP
The only thing that can save Greece now is a Greek Army Officer who can command a brigade of troops, armor and guns to sieze Athens and then to persudade the rest of the Greek Army to save Greece. Otherwise, the Greeks have all just been sold into slavery by their very own 'savior'.
At current population, Greek banks will need 4,662,000,000 Euros per week to fulfill the 420 Euro/week threshhold. It was too variable during the week, but it's easier for the banks borrow a fixed amount to have on hand each Monday. Easier for the ATM operators, too.
OF COURSE, with all the illegal aliens flooding in from North Africa and all, the Greek 'government' will have to give first priority to the poor, huddled, weary masses of Libyans and Israeli State Intelligence Service-recruited 'jihadists' that come in with them.
How'd the banksters come up with this number? Well, they were sitting around in Brussels one day smoking a few joints after sacrificing a virgin to Molock, and trying to arrive at an 'arbitrary' number. One of the geniuses did some math using an empty Zig Zag package and realized that 60 times 7 days is 420, and began cracking up. 'It's "FOUR TWENTY"! GET IT? I'm SO STONED! What WAS that shit?'
On the bright side. illegal aliens may decide to stop coming to Greece as they find oit is no longer an attractive destination.
::::::can I get a toaster if I OPEN an account?:::::: yes, with a minimum of a one thousand dollar deposit:::::but the toaster is only worth ten dollars!:::::::: but it has a picture of kim kardashian on it sitting on hillarys face::::::ok, here is my 1000 dollars:::: but you can only withdraw 5 dollars a month:::::::::::but that wont even pay for the electricity that my toaster uses:::::you can get a loan, but you have to give the toaster back:::::why would I need a loan if I dont have my toaster?:::::::: to buy another one at walmart....
I'm surprised to know that there is a single person that has one euro in a Greek bank.