BUSINESS

Fresh EU concerns mean capital controls to stay longer

YIANNIS PAPADOYIANNIS

TAGS: Banking

The euphoria at local banks in response to the completion of the first review of the country’s third bailout proved very short-lived, as the British referendum result has unleashed a fresh wave of concern and pessimism, setting off a new period of uncertainty.

Worries about the future of the European Union will further hamper efforts to draw deposits back to local banks since Greece remains the weakest link in the eurozone by some distance.

As a result, bank officials say, the lack of any improvement in liquidity conditions is putting off the relaxation of the capital controls imposed a year ago. And to think that just recently officials had been talking about suspending them altogether. The most likely scenario, they say, is for the plans to gradually ease the capital controls to be postponed by several months.

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