The Bank of Greece, in association with the government and the commercial banks, are easing capital controls in Greece in an effort to allow the economy to return to some degree of normality after a month of activity freeze due to the lack of raw materials.
Banks will take some of the workload off the shoulder of the special committee for approving banking transactions as they will now have the authority to approve any import applications valued up to 100,000 euros per client per bank. The unofficial limit so far had been at 50,000 euros. Other measures to facilitate corporate transactions are also being considered.
With turnover in the business sector sliding by an average of 40 percent and losses estimated at 1.1 billion euros per week, the market is immediate seeking solutions, especially regarding the importing of raw materials. The market must also be quick to adjust in order to tackle the new conditions in place.
“Things are evolving in a quite satisfactory manner. In the next 10 days we will resolve the problems created,” pledged Bank of Greece Governor Yannis Stournaras. “In terms of approvals we are already very near the amount of monthly imports that the Greek economy made before the capital controls were imposed. Therefore, we are in general not very far from the way the economy operated before the capital controls,” added the former finance minister after a meeting he chaired on Friday with representatives of the government, employer associations and labor unions.
According to the BoG, the special Banking Transactions Approval Committee has from June 29 to July 23 approved applications of 1.58 billion euros, which is less than half the monthly value of imports Greece regularly makes, amounting to some 3.7 billion euros.
The Greek economy has a very low degree of self-sufficiency, at just 20 percent, which means that 80 percent of raw materials and finished products are imported. Notably, the 1.58 billion euros approved does not necessarily concern import payments.