All cash withdrawals within Greece will be free from all restrictions as of Monday, as the limit of 5,000 euros per month, imposed on June 1, is lifted according to the statement issued by the Finance Ministry on Thursday.
Ending this limitation effectively entails the lifting of all controls on capital flows within the country, with the restrictions that remain concerning only the flow of capital abroad, or how much one can take out of the country.
According to the ministry’s planning, the full lifting of the controls will take place early next year, but yesterday’s decision constitutes a major step in that direction.
Besides removing the limit of 5,000 euros per month on withdrawals from banks in Greece, the ministry announced that withdrawals abroad from Greek bank accounts will have a cap of 5,000 euros. The ceiling on the amount of cash that can be taken abroad in euros or foreign currencies is raised from 3,000 to 10,000 euros per person per trip.
The ministry is also raising the limit on the amount that professionals or enterprises can forward abroad for their professional activities directly via Greek banks from 40,000 to 100,000 euros. Companies and individuals will also be able to transfer abroad any earnings or dividends originating from funds brought from other countries and invested in Greece, at up to 100 percent of the invested capital per calendar year.
The limitless withdrawal of cash within the country is not expected to cause any problems for banks given that the majority of accounts have a balance that is well below the monthly limit of 5,000 euros. According to bank sector statistics, the vast majority of depositors’ average monthly cash withdrawals come to well below 1,000 euros, close to 800 euros.
Consequently, the full liberalization of withdrawals is mostly a measure to impress the markets and investors, as only a small number of workers still have a balance of more than 2,000 euros in their bank account.