The Greek
government on Monday ruled out imposing capital controls that would restrict
the movement of money, despite fears that it is close to leaving the euro.
Then on
Sunday, Syriza's central committee defeated a proposal by the hard-left wing of
the party to stop making its IMF payments and nationalize the banks.
That led an
opposition spokesman to suggest the government would begin restricting bank
withdrawals as soon as June 1 in an effort to prepare Greece for withdrawal
from the euro.
If Greece
fails to make its payment and pulls out of the euro, it will lead massive
capital outflows from Greek banks.
Greece denies need for capital controls
On Monday,
the Syriza government was scrambling to throw cold water on that scenario, with
government spokesman Gabriel Sakellaridis insisting Greece was close to a
bailout deal and had no need for capital controls.
"Such
scenarios lack any foundation whatsoever, are malignant and are used in a
completely irresponsible fashion," Sakellaridis told a press briefing.
"The possibility of us having capital controls, or any other development
in the banking system, quite simply put, does not exist."
Nonetheless
markets across Europe fell on the prospect and the Greek stock market was down
two per cent.
Greece
began talks with bailout creditors to try to beat back strict austerity targets
after the Syriza party won elections on Jan. 25.
And while
it was able to win agreement to negotiate a package of reforms, it has yet to
get the European Union to accept more lenient terms. Syriza argues that the
deep cuts imposed on Greece have blocked its economic recovery.
Sakellaridis
said Monday that there would soon be agreement – by the end of May or the start
of June.
An
estimated 30 billion euros ($33.5 billion) have flowed out of Greek banks since
last year, and a sudden surge of withdrawals triggered by a missed debt payment
could cause the banks to collapse.
(Πηγή:
cbc.ca)
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