Wary Greeks decide it's time to stash their money in their mattresses

Agence France-Presse
People withdraw cash from ATMs in central Athens on June 19, 2015.

Wary about the introduction of capital controls in case of a failure to agree a bailout deal on Monday, Greeks are withdrawing cash, but with a calm fatalism begotten from struggling through six years of economic crisis.

Greeks haven't been making a sudden run on their banks, having steadily reduced their holdings since December, when the early elections were called that propelled the radical left anti-austerity Syriza party to power.

Between December and April Greek individuals and companies withdrew 31.4 billion euros ($35.7 billion).

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Indications are that the pace of withdrawals has picked up, with at least three billion euros taken out in the past week, according to local media.

Many Greeks are doubtful that their Prime Minister Alexis Tsipras will reach a deal on Monday with Athens' EU and IMF creditors on the reforms the country needs to undertake in exchange for 7.2 billion euros in bailout loans.

Without the funds Greece will almost certainly fail to make on June 30 a payment of around 1.5 billion euros to the IMF and therefore faces the very real risk of crashing out of the euro zone.

A payment default would prod Greeks to pull out their money on a massive scale, sparking a real bank run.

But, as economists have pointed out in recent days, the government would probably try to prevent that by slapping on so-called capital controls — limits on transfers and withdrawals — as did neighboring Cyprus in 2013 and has only recently removed.

Yet there was no frenzy in front of ATM machines in Athens on Friday, even though capital controls and default was on everybody's tongues.

"Nobody's stressed out because they've already taken it all out!" joked Panos, 23, a delivery man waiting in front a branch of the National Bank of Greece, one of the country's top four commercial banks, in the middle class neighbourhood of Kolonaki.

Not everyone: a retiree said she came to pull out the rest of her savings after having waited three hours the day before to make a withdrawal.

Maria, 39, said she took out "several hundred euros in case there is no more cash in the ATMs" but that she hadn't touched her savings.

Showing 'responsibility' 

Nikos, a 54-year-old doctor, said he came to take out 1,000 euros for his mother "who is worried after having listened to the news."

Others consider it something of a national duty not to pull the rug out from under the banks.

Kyriaki, a 31-year-old financial analyst, said she "didn't want to be responsible for" a bank run and that she hasn't pulled out her money.

Nevertheless she conceded that if she had a lot of savings, she "might see things differently."

Similarly Athina, who has a foreign bank account, has so far resisted transferring her savings out of the country "because you can't at the same time want both Greece to overcome this crisis and contribute to weakening the system."

This National Bank of Greece branch had limited cash withdrawals to 2,500 euros, which according to banking sources is a normal procedure when too many people try to pull out funds at one branch, and is unlikely a stealth introduction of controls.

BNG's board chairwoman, Louka Katseli, meanwhile on Friday called on Greeks to show "responsibility" as "each of their acts," particularly cash withdrawals, has a "global effect" on the system.

Officials have been quick to tamp down alarmist rumors.

But as the Bank of Greece insisted Friday the country's banking system was stable, sources said it had appealed to the European Central Bank (ECB) for an increase in the lifeline that has kept Greek banks afloat in recent months.

The ECB held an emergency meeting on Friday and increased its funding by 3.3 billion euros, according to the Greek state news agency ANA.

The ECB has refused for months to let Greek banks use government bonds as collateral for central bank loans, leaving only emergency liquidity assistance funding open to them which it has increased in increments.

An increase of 3.3 billion euros would by far be the biggest since February.