More Greek drachma as €800m is withdrawn in a day

Stat of the day: €800m. As political uncertainty continues in Greece, the people yesterday took to the cash machines to withdraw hundreds of millions.

by Michael Northcott
Last Updated: 19 Aug 2013

International concern about the economic situation in Greece is mounting, especially since its parliament has not yet formed a government (though they have a ‘caretaker’ PM) and another election looks likely. But no one can be more concerned than the Greek people, who, sensing that their country may descend into chaos in the coming weeks, have begun hoarding cash.

The figure equates to around €71 for every man, woman and child in Greece, and we don’t reckon the tots have been maxing out the credit card. But adults have certainly got the urge to store some cash under the bed: in the ten days since the Greek elections, the country has withdrawn around €3bn from its ATMs. It’s hard to know where they’re going to spend all these euros if they leave the single currency, though…

Why such panic hoarding, then? Well, many analysts are now openly theorising about the consequences of Greece busting out of the euro and defaulting on its debts, which could be absolutely disastrous. Without further bailout money, it would be a matter of weeks before the government simply couldn’t afford to pay the wages of large numbers of people on the public sector pay roll. 

Concerns about the country are now truly global, since the knock on effect of a Greek default could destroy a string of international banks. Investors know this only too well, and Asian and Western markets have taken a tumble over the last week. Without an obvious solution to the crisis, we can only wait with baited breath to see just how much worse the situation will get…

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