Greek banks are down to their 500 million euros.
Writing in The Telegraph on Thursday, Ambrose Evans-Pritchard cites the head of the Hellenic Chambers of Commerce, who told The Telegraph that, “We are reliably informed that the cash reserves of the banks are down to €500m. Anybody who thinks they are going to open again on Tuesday is day-dreaming. The cash would not last an hour.”
Greek banks are currently closed and the government has implemented capital controls limiting the amount of money people can take out of ATMs.
Banks are set to remain closed through at least next Monday. Currently, the European Central Bank has capped the amount of liquidity available to Greek banks through the ECB’s emergency lending program, and so while Greece has worked to cap outflows in the interim, it seems reserves are running dry.
On Sunday, Greece is set to vote on a bailout referendum on whether to accept the latest terms proposed by Greece’s European creditors. A “Yes” vote would see Greece likely accept a bailout program similar to what was last discussed before Greek prime minister Alexis Tsipras called a surprise referendum last Friday.
A “No” vote would see Greece go back to the drawing board, with some arguing this could put Greece on the path to leaving the euro as it would likely be forced to default on its 3.5 billion euro debt payment due to the ECB on July 20.
On Thursday, Greek finance minister Yanis Varoufakis said he would quit if the Greek people vote “Yes” to accept bailout measures proposed by its creditors. Varoufakis also said that he would rather “cut his arm off” than accept bailout terms that did not include Greece’s creditors taking a haircut — or less than 100 cents on the dollar.
The IMF, however, may have given Varoufakis some cover on Thursday, writing in a report that it expects Greece will need to restructure its debt and that some if may need to be written off. But there is an irony in the IMF admitting one of Varoufakis’ major demands — that Greece’s creditors take a haircut — because if the referendum doesn’t go his way, Varoufakis won’t be there to negotiate.
As we get closer to the Greek referendum it is becoming clearer than neither Varoufakis nor Greek prime minister Alexis Tsipras is likely to be in office much longer if the result of the Greek referendum is a “Yes” to accept new bailout terms, no matter if these revised terms are closer to what they had been seeking in negotiations anyway.
In his piece on Thursday, Evans-Pritchard also details some of the struggles facing Greek companies who are having difficulty importing supplies and could close factories unless the situation turns around soon.
As we head to the weekend and Sunday’s referendum, the latest polls show that it is currently “too close to call.”