BUSINESS

Greece to abolish capital controls by early 2019

EIRINI CHRYSOLORA

The Greek Finance Ministry and Bank of Greece are plannng to completely abolish capital controls by late this year or early next year, according to sources.

Authorities are expected to start in the next few days by lifting restrictions on cash withdrawals from Greek banks. According to the same sources, the current ceiling of 5,000 euros per month per bank account makes little sense as it exceeds the needs of most bank customers. 

Another imminent intervention will involve lifting all restrictions to money transfers abroad, both for individuals and for companies, the sources added.

If all goes well, and barring any unforeseeable political or economic upheaval, these moves will be followed by the end of 2018 or early next year at the latest by the complete lifting of capital controls so as to help the banking system and the economy revert to normality, the sources said.

Such upheaval might actually necessitate the reimposition of restrictions that have been lifted, the sources added, noting that although no economic risks are currently visible, political risks brought on, for instance, by a protracted pre-election period cannot be ruled out.  

In any case, the lifting of restrictions is expected to send a positive message to the markets about the reliability of Greek banks whose stocks taken a beating recently partly due to the absence of investors from Greece. 

In a recent interview with Naftemporiki, Finance Minister Euclid Tsakalotos heralded the lifting of restrictions on Greek banks and indicated that after that would come the final phase involving money transfers abroad. 

Greece imposed capital controls in the summer of 2015 after the European Central Bank refused to increase emergency funding to the country's banks following a breakdown of bailout talks between Athens and foreign creditors. 

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