ECONOMY

Flight of capital continues

The flight of capital in the form of bank deposits by Greeks into foreign-based accounts is continuing at a considerable pace, with bankers identifying this period as the third wave of capital departure abroad. The phenomenon of Greeks withdrawing their money from Greek banks to deposit it in foreign accounts began in December, just after the rumor began to circulate in late November that the Finance Ministry was considering a blanket rule on the origin of deposits, which would put an end to bank confidentiality. The second wave started when fears about the future of Greek economy indicated a possible bankruptcy by Greece due to the government’s inability to borrow money; this occurred in January. The current third wave, as bankers view it, is bolstered by rumors about problems in Greek borrowing and by an unlikely departure from the eurozone and the return to the drachma. Top banking sources have told Kathimerini that the capital that left Greece in the first two waves amounted to between 8 and 10 billion euros. This calculation may seem a little conservative but all indications show that it is not far from the truth. Kathimerini understands that in recent weeks there has been a number of solicitors visiting Cyprus in order to set up companies for their clients so as to transfer capital there or use them to transfer their resources to the island’s banks. The local legislative framework allows for the swift completion of procedures to this end, as one can set up a company in just 48 hours in Cyprus.