Greece: Depositors Panicking, Indices Go Into A Spin

By Roman Mamonov

It has been announced today that emergency parliamentary elections will take place in Greece on June 17th . The current forecasts say that the far left extremists who do not want to save the money and threaten to drive Greece deeper into a debt pit. Against this background, the Greeks have decided to insure themselves and started actively withdrawing their money from the banks.

While investment analysts and bankers are debating about the prospects of Greece leaving the eurozone, its residents, as it appears, have reconciled themselves with the thought about the inevitable crash of the country’s financial sector and about Athens’ expulsion from the Monetary Union. According to the National Bank of Greece, on the first working day of this week depositors withdrew about 700 million euros from their accounts in the Greek banks. This is panic rather than pessimism. And experts believe that the outflow of deposits will increase in the future because under the conditions when the banks may run short of hard currency, the Greek citizens prefer to insure themselves against all possible risks.

As you can see, all this is linked to the political and economic crises the country is currently facing. Against this background the euro has collapsed to a four-month minimum against the dollar to reach the mark of 1.2699. And this is not the limit. The general trend for the euro because of the Greek events remains negative.

Against this background, the rouble is also demonstrating a sharply negative dynamism. Against the dollar the Russian national currency has fallen in price by more than 2 per cent, while the euro has risen in price by nearly one per cent. The currencies of other countries, which are outside the eurozone, including the Polish zloty, the Hungarian forint, and the Norwegian krone, are also falling in price.

Well, there are also some people who benefit from the current situation on the markets, Head of the Centre for Economic Research at the Institute of Globalization and Social Movements Vassily Koltashov says.

“The USA begins a new attack on the euro, which, of course, is linked with the problems that exist in the European economy and in the European financial sector. I believe that the weakening of the euro that occurred this autumn and this winter may continue to reach the mark of 1.25 of the dollar for one euro, should this process not be corrected by the monetary emission in the USA.”

Against the background of another bout of the “Greek” panic, oil quotations have gone down as well: one barrel of Brent Crude has lost 0.7 per cent, and WTI Crude oil – more than one per cent. Gold is also falling in price. Today you pay 1537,30 dollars for one troy ounce. Analysts from the Bank of America believe that this will not continue for long. By the beginning of July, Greece will run short of money. And as soon as this happens, the Greek authorities will have to either accept all the terms of the International Monetary Fund (IMF) and the European Union (EU), or they will find themselves overboard from the eurozone and will start searching for other ways to pay off their debts.