Europe Brings Out The "Capital Controls" Bazooka

Tyler Durden's picture

Here we go:


In other words, that money you thought you had... You don't really have it. We can only hope this message was not meant to restore confidence and prevent future bank runs. Because if Europe wanted a continental bank run, it may have just gotten one.

This is getting scary very fast.

Full piece from Reuters:

European finance officials have discussed as a worst-case scenario limiting the size of withdrawals from ATM machines, imposing border checks and introducing capital controls in at least Greece should Athens decide to leave the euro.

EU officials have told Reuters the ideas are part of a range of contingency plans. They emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen - no one Reuters has spoken to expects Greece to leave the single currency area.

Belgium's finance minister, Steve Vanackere, said at the end of May that it was a basic function of each euro zone member state to be prepared for problems. These discussions appear to be in that vein.

But with increased political uncertainty in Greece following the inconclusive election on May 6 and ahead of a second election on June 17, there is now an increased need to have contingencies in place, the EU sources said.

The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, SYRIZA, may win the second election, increasing the risk that Greece could renege on its EU/IMF bailout and therefore move closer to abandoning the currency.

No decisions have been taken on the calls, but members of the Eurogroup Working Group, which consists of euro zone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, the sources said.

As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.

"Contingency planning is underway for a scenario under which Greece leaves," one of the sources, who has been involved in the conference calls, said. "Limited cash withdrawals from ATMs and limited movement of capital have been considered and analysed."

Another source confirmed the discussions, including that the suspension of Schengen was among the options raised.

"These are not political discussions, these are discussions among finance experts who need to be prepared for any eventuality," the second source said. "It is sensible planning, that is all, planning for the worst-case scenario."

The first official said it was still being examined whether there was a legal basis for such extreme measures.

"The Bank of Greece is not aware of any such plans," a central bank spokesman in Athens told Reuters when asked about the sources' comments.

The vast majority of Greeks - some surveys have indicated 75 to 80 percent - like the euro and want to retain the currency, something Greek politicians are aware of and which may dissuade them from pushing the country too close to the brink.

However, SYRIZA is expected to win or come a strong second on June 17. Alexis Tsipras, the party's 37-year-old leader, has said he plans to tear up or heavily renegotiate the 130-billion-euro bailout agreed with the EU and IMF. The EU and IMF have said they are not prepared to renegotiate.

If those differences cannot be resolved, the threat of the country leaving or being forced out of the euro will remain, and hence the need for contingencies to be in place.

Switzerland said last month it was considering introducing capital controls if the euro falls apart.

In a conference call on May 21, the Eurogroup Working Group told euro zone member states that they should each have a plan in place if Greece were to leave the currency.

Belgium's Vanackere said two days after that call that it was a basic function of each euro zone member state to be prepared for any eventuality.

"All the contingency plans (for Greece) come back to the same thing: to be responsible as a government is to foresee even what you hope to avoid," he told reporters.

"We must insist on efforts to avoid an exit scenario but that doesn't mean we are not preparing for eventualities.

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Overfed's picture

Tell that to the Mujahadeen.

tmosley's picture

A drone or swat team doesn't matter against an armed citizenry.  Might as well use those things to try to stop the tide from coming in.

fuu's picture

Fine. Bring on the tanks, bring on the TAC squads, bring on the drones.

Lets get this fucking party started BiTcHeZ!

When there are tanks in the streets TPTB have already lost. There will be no more keeping the sheep passive and ignorant.

kekekekekekeke's picture

buying gold was the catalyst of me being a gun owner

mayhem_korner's picture



Don't plan on relieving me of my gold when guns and brethren are defending it.  In 3 different locations.

Gully Foyle's picture


Tell that to the drone.

It won't give a shit, neither will it's controller.

Overfed's picture

Loose lips sink ships. If you have physical hard assets, STFU!

Paul Atreides's picture

Go troll and promote fear somewhere else, like they are going to call in drone strikes or swat teams for gold holders when there is mass civil unrest, food riots and a possible civil war.

Cathartes Aura's picture

best check now whether your state has "confiscation laws" such as, say, California - incentives for each local forced policing to "find" anything labeled illegal, allows them to take everything, including property, and add it to their local fiefdom coffers. . .

whose says pirates need to be on the high seas?

robobbob's picture

u need to think outside that box they've built for you.

drones still need operators and support techs to maintain them...............and creatures like the politicians and their banking masters that give the orders that make them fly. if you wait to decide for whom the drone tolls, thats our own fault.

hats off to Picketts charge, a real A+ for bravery. Complete F- failure as an effective strategy. when the centers too strong, roll the flanks

lakecity55's picture

Simply find the drone base and destroy it.

Paul Atreides's picture

Easier to scramble the drones satellite uplink with a microwave transmitter/repeater, predator and reaper drones can be controlled from the other side of the planet using these links.

Non Passaran's picture

All you need is a pair of really big scissors to cut those power lines. Or punch a hole in the pipeline.

GeneMarchbanks's picture

That is quality humor Sandmann. Let the junking commence!

Ghordius's picture

shocking, Sandmann advocating guns and ammo first and then gold and so many junking him. what has ZH become! oh, woe me! ;-)

Martial's picture

What if I have the gold AND 5x their guns? Hypothetically speaking of course....

Pure Evil's picture

They can always set your compound on fire. Waco anyone?

resurger's picture

one thing am sure of, is that you wont die with honor.


mkkby's picture

I had a boating accident.  How will they find it or even know I ever had any gold?

kilters's picture

I'm pulling my few remaining euro's out tomorrow. Today of all days has finally motivated me to act.

tocointhephrase's picture

The next step after the BANK RUN (withdrawal) is to stop said currency from depreciating by buying Physical Gold and Silver!

stocktivity's picture

Smart move...if I had Euros in a European bank, I'd take them out too.

EasterBunny's picture

and what would you do with it?


Sandmann's picture

This is the logical outcome. After all within 3 years the USA will impose Tariffs on China as will the EU and let Asia implode. The alternative of watching Western Civilisation collapse into the kind of mess the USSR was after Russia collapsed may not be appealing

gjp's picture

Interesting conclusion.  Stop cheap Asian supply and it's Asia that collapses?  It's possible, but I wouldn't want to be at the local Wal-Mart when the gravy train derails.

It really seems like a fundamental disconnect among people thinking that the producers will suffer more than the consumers when their dysfunctional yet symbiotic relationship is finally deemed toxic beyond repair.

Marco's picture

Still for the most part China is a producer of luxuries (although the west is letting some very critical industries get outsourced, so how long that remains approximately true is an open question). Live would get less comfortable without China, but we wouldn't starve.

Bollixed's picture

"It really seems like a fundamental disconnect among people thinking that the producers will suffer more than the consumers when their dysfunctional yet symbiotic relationship is finally deemed toxic beyond repair."

I'm sure we can break the cycle of taking discretionary money and using it to buy crap that hits the landfills in no time flat. That Wal-Mart junk people think they need to survive is but another illusion of middle class manifestation.

The real truth, I suspect, is once society weans itself of the 'Beanie Baby mentality' and starts to value quality goods that actually have what could be described as 'purposely functional' traits, and a shelf life longer than the credit card payoff, it may indeed be the producers who are found to be the ones suffering.

Nowhere in the food, clothing, and shelter equation does it stipulate you'll need a George Foreman grill, a 45" Plasma screen, and Crocs clogs to survive.

Those producers need to sell that stuff, but people don't need to buy them. There's a reason the self storage industry is so huge, and it has nothing to do with logical thinking on the part of consumers, btw.

carbonmutant's picture

The Schengen Agreement is dead

Tirpitz's picture

Yeah, those tariffs are overdue. I'd start with import restrictions on rare earth materials, heavy metals like tungsten and cobalt, and add a few high-tech ARM chips for missile guidance systems for good measure.

Broomer's picture

Civilization? Where, I can't see one.

mkkby's picture

Not logical at all.  The US likes printing worthless paper and exchanging it for the hard work and real resources out of China.  If anything China will back out of the deal, once a better currency is available. 

They're already buying gold as fast as they can without spiking the price on themselves.  They know exacly what's going on.

Eclipse89's picture

What a bunch of idiots

tony bonn's picture

worst case scenario my ass.....those neo-nazi european unionists have lusted after other people's money since time immemorial....this theft is another step in their quest to realizing the 5th reich - the 4th reich already well established in amerika.....

drink or die's picture

Guess I should postpone my Greek vacation...

bdc63's picture

... I would suggest indefinately ...

drink or die's picture

Believe it or not, my girlfriend was trying to talk me into a Greek vacation about 3 weeks ago.  Had to go and find some youtube videos to talk her out of it.

mkkby's picture

That's like shying away from the US because you saw crime in Detroit on the tee vee.  Just stay away from the poor slums and inner cities - good advice anywhere/anytime.

I'm sure the values are great there now in the sea side resorts and small towns.  Even better after the devaluation.

stocktivity's picture

Depends...if you're alone and in good shape, you should be fine. However, Greece won't be a place to take the family on vacation this summer. Riots and thugs could easily separate you from your wife (and children).

TrillionDollarBoner's picture

Jesus. Do people have no idea what it is like in Greece away from Athens and the other major cities?

Most of the islands and rural regions will sleep through this, whatever happens. They have been through this kind of shit before, and those white-washed villages will look just the same on the other side. The place is full of farmers, fishermen, tight communities, and they will be so fine and so chilled about this in comparison with city folk from points north and west. Avoid Athens, sure, but you can fly staight to many of the islands, and they will be paradise this summer because so many scaredy-cat tourists have stayed away. 

[soon as the drachma is back, I'm there!]

kekekekekekeke's picture

I know quite a few people going (I guess because it's cheap)

but idk I've been known to go to some sketchy places at sketchy times makes for a good story

larry david's picture

This has got to be super bullish right?  Right?  Right????  Robo????

the 300000000th percent's picture

Are they trying to intensify bank runs?????

mayhem_korner's picture



The words "nobody panic" causes more panic than any others, methinks.

tmosley's picture

At least they remembered to bring their Spiderman towel.

Dr. Engali's picture

Okay guys...I'm out of here. Headed to the retreat.

mrktwtch2's picture

wont this be somehow spun as bullish?? or is it now just sell whenever they say somehting..

Thomas Jefferson's picture

Hold me!  Lyndsey Williams right again!