Greek banks down to €500m in cash reserves as economy crashes

[Bosonic]

Source: The Telegraph

Greece is sliding into a full-blown national crisis as the final cash reserves of the banking system evaporate by the hour and swathes of industry start to shut down, precipitating the near disintegration of the ruling coalition.

Business leaders have been locked in talks with the Bank of Greece, pleading for the immediate release of emergency liquidity funds (ELA) to cover food imports and pharmaceutical goods before the tourist sector hits a brick wall.

Officials say the central bank will release the funds as soon as Friday, but this is a stop-gap measure at best. "We are on a war footing in this country," said Yanis Varoufakis, the Greek finance minister.

The daily allowance of cash from many ATM machines has already dropped from €60 to €50, purportedly because €20 notes are running out. Large numbers are empty. The financial contagion is spreading fast as petrol stations and small businesses stop accepting credit cards.

Read more: http://www.telegraph.co.uk/finance/economics/11714655/Greek-banks-down-to-500m-in-cash-reserves-as-economy-crashes.html

[jtuck004]

1. The alternative is servitude. Hey, it's what we chose. It's not so bad if you don't mind throwing

100 million of your people, along with their kids and grandkids, in the trash to support the assets of the rest of the two-faced ass clowns.

Then you can pretend it only costs them, not you.

[Beauregard]

2. The banks will soon have to pay depositors in drachmas.

The Greek government has to start the printing press.

[brooklynite]

22. And those Drachmas will be backed by.....?

[Yupster]

23. The full faith and credit of the Greek Government

What more could you ask for?

[Beauregard]

26. :)

Yes.

[Warpy]

3. They'll be doing barter the way Argentina did

during the worst part of the IMF caused crisis there in 2001.

The IMF learned absolutely nothing from their bungling in Argentina.

If Greece votes "no," two things will happen: first, all the money will disappear overnight and second, the rest of Europe will do whatever they can to punish them severely. However, Spain, Italy, Portugal and Ireland will be watching very closely, planning their own exit from the Eurozone.

[Roland99]

4. They should have pulled an Iceland a few years ago.

[hedda_foil]

5. If I'm recalling correctly, Greece doesn't have enough arable land to grow most of its own food.

That means they have to import the majority of their foods from elsewhere. If the drachma isn't recognized, and the Eurozone stands firm, the Greek people could be starving by Autumn. The one thing people need to acquire (beg, buy, borrow or steal) is food. This is truly horrifying to contemplate.

[Helen Borg]

6. Does Iceland have enough arable land?

[hack89]

10. The Icelandic government didn't run out of money

it was not a sovereign debt problem that cause the Iceland crisis.

[Warpy]

7. Yes and no. They do have a history of being able to feed themselves

although people are going to have to make a lot of dietary adjustments to do so. The problem is not the lack of land, the problem is that a lot of their agriculture has been priced out of business by cheaper products flooding in from elsewhere. With those products prohibitively expensive, the land will have to be put back into use. Short term, they're going to be hungry and if you've ever been involuntarily hungry, you know it is terrible.

One way they can raise money is put the military crap their right wing governments were bribed to buy up on credit on the auction block. I'm sure the rest of the world will be all too ready to cough up to keep it out of the hands of ISIS.

[hedda_foil]

8. Right. They've been exporting their most valuable agricultural products, of course.

Here's what I could find that's current. http://www.cnbc.com/id/102805730

"There's a lot of speculation and even more tension," said George Frangistas, president of Incofruit-Hellas, the trade association of Greek export enterprises for fruits, vegetables and juice. "Clearly with closed banks and political pressure boiling over normal trade cannot go on."

Some food companies are refusing to make deliveries unless they are paid upfront and there are reports of empty store shelves as panicked consumers try to buy food. Also, key farm inputs such as fertilizers, pesticides and fuel also are usually imported and will require payment in advance in hard currency that is no longer available.

"Imports (have) already ground to an immediate stop and exports are limited to the available transport currently in Greece," said Frangistas, who also serves as managing director of exporter Gefra.

Even before Greece headed towards default on its IMF loans on Tuesday there were troubles brewing on the agri-food front. Last year, Greece's ag sector got hit after Russia banned EU food imports. Russia was once responsible for importing more than half of the Greek peach crop and most of its strawberries, and the Greek kiwi fruit market was growing, too.

It sounds like Russia might just be willing to help Greece out considerably if they break with the EU. In fact, I'd guess that Putin would be tickled pink (unless that's from his tanning bed.)

[No Vested Interest]

14. If not Russia, China has been a willing partner in South America and

other countries, as well as loans to the US.
Aside from loans to governments, China and individual Chinese investors also invest in private enterprise throughout the globe.

[Javaman]

9. It will be very interesting to watch what Russia and China do now. nt

[Helen Borg]

11. Buy Greece?

[Javaman]

16. give them a better deal on a loan. nt

[hack89]

19. Both are just as ruthless as the EU and IMF

so I can't imagine it really makes that much of a difference. I somehow doubt they will willingly take a haircut when Greece defaults again.

[Javaman]

21. Oh I agree, but...

if china or Russia are looking to exert some influence in that area of the world, this would be a perfect opportunity.

[closeupready]

25. China is expansionist; they will step in, if necessary.

[Turbineguy]

12. Maybe the U.S will have to do something.

Last edited Thu Jul 2, 2015, 06:25 PM - Edit history (1)

Perhaps Wall Street can come up with an expensive and profitable plan.....

[geek tragedy]

13. NOOOOO! Keep the US out of that mess.

Greece is Europe's problem, and Europe is Greece's problem.

[valerief]

15. Invasion is what the U.S. does. nt

[Helen Borg]

20. Need some creative and novel Ponzi scheme!

[muriel_volestrangler]

17. Greek economy close to collapse as food and medicine run short

Food staples, such as sugar and flour, were also fast running out on Friday as consumers started to feel the effect of the restrictions.

“We have shortages,” said Mary Papadopoulou, who runs a pharmacy in the picturesque district of Plaka beneath the ancient Acropolis. “We’ve run out of thyroxine [thyroid treatment] and unless things change dramatically we’ll be having a lot more shortages next week.”

Greek islands, where thousands of holidaymakers headed this week, have also been hit, with popular Cycladic destinations such as Mykonos and Santorini reporting shortages of basic foodstuffs. More than half of Greece’s food supplies – and the vast majority of pharmaceuticals – are imported, but with bank transfers now banned, companies are unable to pay suppliers.
...
Tourism, the mainstay of the Greek economy and its main export earner, has seen an estimated 50,000 holidaymakers cancelling bookings every day since Tsipras walked out of talks in Brussels a week ago. The Greek Tourism Confederation (SETE) announced that bookings were down by 40% in the last few days.

http://www.theguardian.com/world/2015/jul/03/greece-economy-collapse-close-food-medicine-shortage

[Comrade Grumpy]

18. Huge crowds at the "No" rally in Athens tonight.

I saw it live on Al Jazeera. CNN was too busy with terror threats, and Fox was busy lauding our soldiers and cops.

[Adrahil]

24. Well, with the NO vote, this is gonna get pretty nasty.

Syriza is hoping to resume negotiations. The Troika seems to be saying no. And Greece is running out of cash. It'a gonna be some VERY tough months for the Greeks. They didn't have any good options, IMO. But I do think many of them did not realize what happens next.

[AngryAmish]

27. I hope they have De La Rue on speeddial.