German media comment on abolition of capital controls in Greece

The German press notes with interest the decision of the new Greek government to completely abolish capital control.

“Greece completely lifts restrictions on capital movements” is the headline in the online edition of the Handelsblatt financial daily. The report states that “four years after the controls were imposed, the conservative government in Athens decided to lift all restrictions on cash flow”. The article goes on to note that “Athens is increasingly regaining confidence in the capital markets: on Monday the 10-year bond yield fell below 2%. In previous years it had even reached 35.5%, as a result of which the country could not borrow on the markets. However, the demand for Greek bonds is not only a sign of confidence for the Greek economy, but is mainly due to … greed: it is one of the few bonds in the eurozone to offer a yield. This proves that in Greece the risk has not completely disappeared. ”

And Handelsblatt continues to express reservations: “No new flight of deposits can be ruled out. Earlier this year, Greek credit institutions had warned against hastily lifting restrictions on capital, as they were worried that many Greeks would trust their money to foreign banks. Even today Greek GDP is down 23% from pre-crisis times. It is estimated that if we subtract inflation, it will again approach 2007 levels by the beginning of the next decade. ”

Money abroad or in the … mattress

“Greeks can still spend unlimited amounts abroad,” commented Der Spiegel’s online edition. Looking back, the report recalls that “with the crisis in 2010 many Greeks, fearing a collapse of the banking system, had withdrawn large sums from their bank accounts and carried them abroad or hid them at home. To stop the outflow of funds the then left-wing government of Alexis Tsipras had imposed restrictions on the movement of capital on 1 July 2015. In the first months after their enforcement, citizens could only raise 60 euros a day from their bank account. However, there have been many decisions since then to relax the restrictive measures. But again, on their trips abroad, the Greeks were not allowed to bring more than 10,000 euros with them. Remittances abroad were limited to 4,000 euros per two months. Both of those restrictions are going to be lifted now. “