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article imageGreek banks facing risk of run in election fears

By David Amerland     Jun 13, 2012 in Business
Athens - Major Greek banks are losing as much as 800 million Euros a day, as panicked consumers withdraw their money and begin panic-buying at supermarkets.
Fears that a win for the leftist Syriza party could end up with Greece leaving the EU and a return to the drachma have created panic amongst consumers in the country. In the run-up to the election this weekend, polls have been banned and in the vacuum created party whips have leaked unofficial polls. Unsurprisingly, each shows the party that leaked it to be in the lead.
It is the ensuing uncertainty and sense of chaos which is doing the most damage however. Major banks in Greece reported that up to 800 million Euros ($1 billion) was being withdrawn on a daily basis as those who still have savings in the country try to safeguard them. Some of that money was wired abroad or invested in money market funds and EIB bonds.
A percentage of it ended up as windfall for local retailers as panicked consumers stock up in non-perishable goods. Some supermarket chains in the capital have found it difficult to keep enough pasta and canned goods stocked. Others have reported a run on staples such as sugar and flour as fearful Greeks conjure up an image of the country thrown out of the EU and left to fend for itself without cash and a new currency of questionable value.
Officially no one wants to see Greece leave the EU or the Euro but leaked plans of contingency preparations for such an eventuality, reported in The Irish Times have only fuelled the speculation and sense of unease Greek voters are feeling and have added to their sense of panic.
In an effort to appease angry voters who in the first round of elections made their desperation felt at the ballot by voting for extremists and left wing rivals, conservative New Democracy Leader, Antonis Samaras announced on Wednesday that his party was able to modify the current debt deal Greece is labouring under through renegotiation of its terms with European leaders.
The fact remains that a fifth year of a hard recession has sapped the will of Greek voters and made it hard for them to trust anybody. Last-minute announcements and fresh promises may result in a vote result that allows Greece to form a stable government. If that happens, the new government formed will still have the herculean task ahead of it, of getting Greece out of its current crisis and reforming its economy for growth.
More about greek debt crisis, Greek financial crisis, Greek banks, Greek elections
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