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Money sloshes in and out of Greek banks

greekbankGreek banks suffered an outflow of €12 billion in January, according to the European Central Bank.

Figures for February have not yet been published, but the indications are that money continued to flow out of the country’s banks.

Another source, Bloomberg, estimates that the real figure was in excess of €20 billion withdrawn since the beginning of December when elections were called.

Greek citizens appear to trust mattresses more than banks in the current political stormy weather, but it also critically endangers the country’s financial system.

The country’s new Syriza ministers took on EU ministers to get an extension of four months on its €172 billion bailout loan.

An agreement in principle was finally struck, and on Thursday Greek finance minister Varoufakis claimed that deposits were flooding back.

“There was a deposit flight back into the Greek banking sector,” Varoufakis told Bloomberg TV. “It’s a question of direction. Once you turn the tide, you hope.” He added that €700m was deposited at Greek banks on Tuesday alone.

It remains for Greece to submit a list of proposed economic reforms it plans to carry out in order to get the extension approved. Caught between the party’s more leftwing parliamentarians and a cold German glare, nothing is guaranteed.

Varoufakis said on Wednesday: “It’s not easy for Greece, but it also isn’t easy for others. Nobody can live permanently beyond their means.”

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