ECONOMY

Greek bank deposits fall in June

Greek bank deposits dropped in June, suggesting that their gradual return over the past 12 months is running out of steam, central bank data showed on Thursday.

Deposits of businesses and households fell 0.5 percent from the previous month to 162.65 billion euros ($215.3 billion)according to the Bank of Greece.

Greek banks had lost about 90 billion euros in deposits, a third of the total, after the country’s debt crisis erupted in late 2009, partly due to capital flight on fears of a euro zone exit.

But more than 17 billion have returned since mid-June last year, when the election of a new government eased fears Athens would leave the single currency.

Those inflows, however, seem to be drying up as austerity-hit households and businesses run down bank accounts to pay for higher taxes imposed as part of the country’s international bailout, while incomes drop.

Households’ disposable income fell at an annual pace of 6.2 percent in the first quarter, Greek statistics agency ELSTAT said on Thursday. This comes on top a 30 percent decrease, in real terms, in 2009-2012 as a result of a crippling recession.

Despite their recapitalization with up to 50 billion euros in bailout funds, Greek banks continue reducing their lending to the private sector to save capital. Loans to businesses and households shrank at an annual pace of 4.1 percent in June, the central bank said. [Reuters]