In the wake of the political chaos, panicked Greeks keep withdrawning their savings from banks fearing that their precious Euros will soon be converted into worthless drachmas. Greeks withdrew as much as 5 billion Euros — nearly 3% (!) of total deposits — said one banker to Reuters who however declined to be named.
“Many people withdrew their money from banks on Thursday and Friday and money couriers had a hard time supplying banks with cash to satisfy the emergency demand …We got to the point where customers ordered amounts of up to 600,000 to 700,000 Euros in cash to take home — unbelievable,” the banker said.
Greece’s central bank governor Provopoulos made a dramatic appeal for a new government to take charge a.s.a.p and warned that Greece’s euro zone membership is in danger.“The uncertainty is killing both the economy and the banking system,” he told Reuters. “There must be a strong government that will work hard to ensure the country’s future in the euro-zone.”
Many wealthy Greeks have already transferred their money into foreign banks since last year but now even middle-class Greeks are demanding large amounts in euro banknotes, fearing that their bank savings might be converted into devalued-worthless new drachmas.
Most economists passionately argue that Greece going back to the drachma would be mad. Greece’s banking system would collapse and inflation would explode . Without a credible currency, an urbanized nation like Greece they say can quickly descend into chaos—and even starvation. But the number of Greeks endorsing such a radical move is actually growing! Drachma advocates claim that there are many benefits of re-gaining control of its currency, such as increased competitiveness that would outweigh the costs of leaving the euro zone and defaulting.
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