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Greek Banks Approaching Collapse

A few weeks ago, we reported that investors in Greece were beginning to pull their money out of the country’s banks. Although that flood had slowed down of late, it is beginning to pick up again ahead of the elections on Sunday—and this time the flood may grow into a deluge. The Wall Street Journal reports that the largest foreign owner of a Greek bank, France’s Credit Agricole, has announced plans to sell their Greek division if Greece exit the Eurozone. While no other foreign banks have announced similar plans, many are already beginning to develop contingency plans in case of a Greek euro exit. Credit Agricole likely won’t be the only foreign bank that plans to ditch business in Greece if things go south.

What’s more, Greeks themselves are increasingly ditching the Greek banking business too. They have begun to pull money out of their country’s banks at an alarming rate. One banker estimates that as many as 900 million euros have been withdrawn in the past week alone, and this trend shows no sign of slowing down. And whether this marks a turning point or another temporary setback may hinge on Sunday’s election.

All of which brings to mind one definition of an idiot: a Greek who still has his money in a local bank. If you have friends or family in Greece, tell them to get it out now. At this point, the mattress is looking like a much, much safer bet.

The time bomb is ticking down. Tick, tick, tick…

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  • dean jackson

    Actually, credible sources were reporting 600 to 900 euros a DAY were being withdrawn.

  • Soul

    Should be an interesting day in Greece. I recall Robert Samuelson making a similar observation about why leave money in Greek banks? I figure some institutions feel they will be backed up by governments if worse comes to worse – or possibly even coercion to leave money, keeping the banks alive. Hard to say.

    Didn’t get around to mentioning it, but last time I was on the boards, it seemed a great number of people where debating something you have made a point on, automation and white collar jobs.

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