The great quest for the restoration of trust so that deposits can return to banks and restart the economy is a challenge both for the government and the banking system, which is anxiously awaiting moves that can truly restore trust.
A report in the Guardian, however, asserts that Greece has a long way to go before reaching fiscal balance and persuading the markets that it will not repeat the errors of the past.
The German “block” on the disbursement of a 28 million euro tranche was a resounding message.
The government has not sufficiently focused on the creation of a suitable climate for banks’ coffers to fill up again.
As Bank of Greece Governor Yannis Stournaras reveals, households are still holding their cash far away from banks as they fear for the security of their deposits. Stournaras says this involves somewhere between 12 and 14 billion euros.
Moreover, businesses have deposited 10 billion euros in cash abroad. “The threat of Brexit no longer exists, so there is no reason for them not to bring their capital back to Greece,” Stournaras says.
One source said that a single company has nearly one billion euros in deposits abroad, although they could bring the money back to Greece.
Stournaras is calling on companies to display patriotism and bring their money back, thus issuing a resounding message to those who prefer to leave their money at home.
The Central Bank says that the return of deposits is central to the lifting of capital controls. Stournaras says that there has been an influx of deposits, but that it is not strong enough to completely eliminate capital controls.
That means Greece will exit the bailout programme in a month with capital controls still in place.