ATHENS, Greece (AP) — Bank deposits in Greece have hit their lowest in more than a decade, according to data released Friday, as Greeks concerned about the painfully slow pace of their government’s talks with bailout creditors withdrew savings in an orderly but steady flow.
European Central Bank figures showed more than 5 billion euros ($5.5 billion) left in April, in a trend that started last autumn and accelerated after early elections were called in December.
The radical left-led government that was elected in January is running out of cash. It urgently needs to wind up negotiations with creditors on what reforms it must make to get a vital 7.2 billion euro ($7.8 billion) payment from the bailout plan that has kept it afloat for five years. Otherwise, the country could default within weeks and crash out of the euro currency union.
Despite repeated assurances from Athens that a deal is imminent — as soon as this weekend — European officials seem nonplussed, saying much remains to be done.
Jean-Claude Juncker, the president of the European Union’s executive Commission, sought Friday to alleviate fears of a stalemate, saying the issue “will be solved in the next coming days and weeks.”
Greece has four debt payments to the IMF through June 19, and government officials have claimed it will be unable to make the first, a week away, without a deal.
But analysts say the IMF payments could be “bundled” together at the end of June, and an IMF spokesman confirmed that the option exists. He said Athens hadn’t made a request to combine repayments, adding that the last country to do so was Zambia three decades ago.
“Despite denials from Athens, it is likely that the Greek government will apply for this solution before the next payment is due,” Teneo Intelligence analyst Wolfango Piccoli said in a note Friday. He said this would provide the Greek government with more time and allow it “to score some points with its domestic constituency by showing it is bargaining hard with the creditors.”
Piccoli also warned that European creditors might soon present Greece with a take-it-or-leave-it offer, which, if unpalatable to Athens could prompt a referendum.
Finance Minister Yanis Varoufakis said the final deadline for an agreement is the end of June. He said the deal would “once and for all” settle all outstanding problems, including the most contentious: Some kind of relief for Greece’s crushing debt load, and reforms to the pension system and labor market.
“This negotiation has taken long enough,” he told Vima FM radio. “We are not prepared to drag the Greek people — and ourselves, I must add — all the way to September.”
The governing Syriza party was elected on pledges to end five years of deeply resented income cuts, tax hikes, increases in retirement ages and diluted labor rights. These were demanded by bailout creditors — the IMF, European Commission and European Central Bank — but worsened a deep recession and left more than one in four workers jobless. The debt relief deal was a key part of Syriza’s platform, but was pushed backstage soon after the election.
As negotiations dragged on, Greek deposits ebbed steadily, though there was no sign of the kind of mass withdrawals that would force the government to put restrictions on money transfer to keep the banking system from collapse.
Household deposits at the end of April were 139.4 billion euros ($151.9 billion), down from 145 billion euros in March and 172 billion in December. The figure is the lowest since November 2004, when the Greek economy was booming in the aftermath of the Athens Olympic Games.
Figures for May are not yet available, although comments by Varoufakis this week on a possible tax on ATM withdrawals — the idea quickly retracted — or taxing undeclared deposits in Greece at double the rate for undeclared deposits abroad are not likely to have helped.
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