Haircut fears boost state coffers

Despite the closure of Greece’s banks, no less than 1 billion euros has flowed into the state coffers since June 29, when capital controls were imposed, allowing the government to cover some of its obligations.

The fear of a possible haircut on bank deposits has convinced thousands of enterprises and taxpayers to pay off their income tax – in lump sums, too – and value-added tax dues via e-banking in order to lighten their holdings.

Despite government assurances that there won’t be a bank bail-in, many citizens consider it inevitable and are trying to reduce their bank deposits, either by paying off taxes, paying salaries to employees, or even settling debts to suppliers and associates.

Bank data show that from June 29 up to July 8 a total of 700 million euros was forwarded electronically to the tax authorities, while another 300 million euros was paid in cash at the country’s tax offices.

Part of this 1 billion euros has been used for the payment of salaries at the start of July and some 300 million euros will be used for the half-month salaries of civil servants due on July 15.