The Balkan Chronicle

Category: Economy

Political leaders in Athens were due to discuss an emergency government Wednesday to deal with a possible run on banks as it emerged Greeks withdrew almost $900 million in a single day, fearing their country could crash out of the euro currency by the end of the week. An interim government would take the country through to new elections on June 17, triggered by the collapse on Tuesday of talks to form a coalition between winners of the inconclusive May 6 election. Greeks are withdrawing euros from banks, apparently afraid of the prospect of rapid devaluation if the country leaves the European single currency and returns to the drachma. President Karolos Papoulias warned of "great fear that could develop into a panic," the minutes of Papoulias' negotiations with political leaders showed, according to Reuters. The minutes also reveal Papoulias was warned by George Provopoulos, head of the country's central bank, that savers withdrew at least 700 million euros ($894 million) on Monday. "Withdrawals and outflows by 4:00 p.m. when I called him exceeded 600 million euros and reached 700 million euros," the president said according to the minutes of the meeting. "He expects total outflows of about 800 million euros." Several banking sources told Reuters similar amounts had also been withdrawn on Tuesday. Nevertheless, there was no sign of panic or queues at bank branches in Athens on Wednesday. Bankers dismissed suggestions that a bank run was looming.

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