Greek bank run feared

Greek bank run feared

Customers queue to use ATM outside a National Bank of Greece branch in Thessaloniki on Saturday. (Bloomberg Photo)
Customers queue to use ATM outside a National Bank of Greece branch in Thessaloniki on Saturday. (Bloomberg Photo)

ATHENS — Hundreds of people lined up at Greek banks and drained cash machines after Prime Minister Alexis Tsipras called a referendum to decide his country’s fate following the latest impasse in talks with creditors.

Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some lenders may not be able open on Monday unless there was an emergency liquidity injection from the Bank of Greece.

A central bank spokesman said it was making efforts to supply money to the system. Parliament, meanwhile, was planning a vote at midnight local time on whether to go ahead with a proposed July 5 referendum.

"I’m here to take my mother’s pension out before the machine runs out of cash," said Erato Spyropoulou, who was standing in a line of about eight people at a National Bank of Greece ATM. "It’s very worrying what’s happening because people don’t know what they’re being asked to vote for. It’s the last nail in Greece’s coffin."

After withdrawing more than 30 billion euros (US$33.5 billion) as the anti-austerity Syriza party took power last year, depositors are now reacting to the latest twist in the five-month standoff with European leaders and creditors.

One banker said his institution had lost 110 million euros on Saturday by 11:30am local time.

The European Central Bank has been reviewing liquidity conditions at Greek banks daily. Bank officials in Athens said they were expecting a shortage of euro notes by as early as Saturday evening.

Greek bank deposits by businesses and households fell to 129.9 billion euros in May from 133.7 billion the month before, according to data released by Bank of Greece on Thursday.

Executives from National Bank of Greece, Alpha Bank, Piraeus Bank and Eurobank Ergasias, the country's four-biggest banks, all declined to comment.

About 100 people were lined up at a Piraeus Bank branch at a central Athens street before it opened. Some said they had waited for about three hours. Once word got out that the bank wouldn’t open, one elderly woman fainted.

Some branches of Alpha Bank in central Athens that normally open for business on Saturdays remained shut and one carried a sign that it would not open.

Euro zone finance ministers were gathering in Brussels for an emergency meeting later Saturday that was originally slated to discuss a proposal to unlock 15.5 billion euros and extend Greece’s bailout programme through November.

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