Greece ends capital controls after 50 months

Athens imposed capital controls in June 2015, when Greece was embroiled in a dispute with lenders over how to prop up an economy overwhelmed by a mountain of debt and its banks were bleeding cash. [EPA/ARMANDO BABANI]

The Greek government fully lifted the capital controls introduced during the crisis in 2015 on Monday (26 August), in a sign of its growing economic confidence following the end of the bailout programme last year.

“In cooperation with the Bank of Greece, the free movement of capital has been fully restored. The capital controls now belong to the past,” Greek Prime Minister Kyriakos Mitsotakis said, adding that economic insecurity is now gone.

Athens imposed capital controls in June 2015, when Greece was embroiled in a dispute with lenders over how to prop up an economy overwhelmed by a mountain of debt and its banks were bleeding cash.

At the time, the European Central Bank decided to pull the plug on emergency funding to Greek lenders, forcing a three-week shutdown of banks and a 60 euro per day cap on cash machine withdrawals.

The restrictions have been gradually eased since then. The cap on cash withdrawals was fully lifted in October 2018. But limits on money transfers abroad still remained.

The conservative leader Mitsotakis blamed the previous leftist Syriza government for having caused a “trust crisis” which resulted in hundreds of millions of outflows from Greek banks.

He added that following the 7 July national election, the global markets’ trust in the banking system and the country’s economy was restored. The lift will apply as of 1 September.

The opposition Syriza party accused Mitsotakis’ ruling New Democracy of trying to take advantage of the issue on a communication level, while the reality is different.

“New Democracy’s narrative about Syriza’s disastrous policy has collapsed. Because it was this policy that reduced primary surpluses, allowed us to exit the bailouts […] and eventually the planned abolition of the capital controls,” Syriza lawmaker Dimitris Tzanakopoulos said.

The opposition has also repeatedly hinted that while it was in power, the Bank of Greece Governor Yannis Stournaras, who had been appointed by a previous New Democracy government, undermined Syriza’s efforts to exit the bailout.

[Edited by Zoran Radosavljevic]

"The complete abolition of capital controls should be accompanied by a sharp reduction in all fees and commissions imposed by banks, as these high costs adversely affect the competitiveness of Greek businesses and in many cases even lead businesses to a standstill," commented Konstantinos Michalos, the president of the Athens Chamber of Commerce and Industry and deputy president of the Association of European Chambers of Commerce and Industry (Eurochambres).

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