Greekcitizens are emptying savings accounts and buying gold as they bracethemselves for the possibility of a sovereign default and runs on thecountry’s banks.
Pledges by George Papandreou,the Socialist prime minister, that his government would “save thecountry” have been widely discounted by a cynical public. Parliament wasexpected to give his new government a vote of confidence late onTuesday night. The socialists have a six-seat majority in the 300-memberhouse.
Sales of gold coins have soared as savers seek a safer andfungible source of value. “When the global financial crisis started,our sales of coins to investors overtook bullion for the first time,”said Harry Krinakis, at Sepheriades, a Greek precious metals trader.“Now the sales ratio has reached five to one.”
Tomas, a computertechnician, has exchanged his euro savings for gold coins: “I keep themat home just like my grandmother did in the second world war.”
Monthlybank withdrawals were running at €1.5bn-€2bn ($2.2bn-$2.9bn) in thefirst quarter. Last year, depositors withdrew €30bn from Greek banks,equivalent to 12.3 per cent of total savings, according to the centralbank.
Last year, Greek deposits worth an estimated €8bn weretransferred to banks in Cyprus. But the flow has dried up this year amidfears that Cypriot banks, which have high exposure to Greek corporateborrowers, could suffer contagion.
“We can’t trust the politicians to get us out of this mess [and] have to protect our families,” said Sakis at an anti-austerity protest in Athens’ Syntagma square. “A bank collapse has got to be on the cards.”
Hesaid he had withdrawn his savings and placed them in a bank safedeposit box “for security. Who cares about interest right now?”
Othersput their savings into land when prices fell after Greece’s firstEuropean Union-led rescue in the middle of last year. Angelos, asoftware specialist, bought a neighbour’s olive grove in his homevillage. “I grabbed the opportunity,” he said. “A year ago I wouldn’thave considered making such an old-fashioned investment.”