It Begins…Anxious Greeks Emptying Their Bank Accounts

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Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending — and are inadvertently making the recession even worse.

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Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. “In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale,” he recently told the economic affairs committee of the Greek parliament.

With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn’t managing to recover from a recession that has gone on for three years now: “Our banking system lacks the scope to finance growth.”

He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion — by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October — the biggest monthly outflow of funds since the start of the debt crisis in late 2009.

The raid on bank accounts stems from deep uncertainty in Greek households which culminated in early November during the political turmoil that followed the announcement by then-Prime Minister Georgios Papandreou of a referendum on the second Greek bailout package.

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As a minor note:

At the end of this little article is this note:

The propagand-conomist Paul Krugman — a proponent of the debt-ridden European social welfare state — hardest hit.

It links to this:
http://directorblue.blogspot.com/2011/11/todays-paul-krugman-hoisted-on-his-own.html

But Paul Krugman was NOT the only Obama economist hard hit by Europe.

Jon Corzine (sp?) lost over $1.5 billion dollars of his investors’ money because he, too, was so sure that Europe was worth betting it all on.

Jon and Paul were two of many economists Obama and Biden depended on as telling the American public how Obama was on the right track.
They don’t look so smart now, do they?

Bright side of your comment, Nan G… the elite elected Dems, also find themselves on the hook, what with all the cash that Corzine has funneled their way.

tsk tsk… so sad

/sarc

Well, unless they send that money overseas, it will be worth little more than toilet paper if their economy collapses.