Greece to fully lift crisis-era capital controls
Greece’s new government today announced it will lift capital controls imposed during its debt crisis in 2015 in a move aimed at restoring the trust of international investors in the country.
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Prime Minister Kyriakos Mitsotakis told the Greek parliament: “From today, capital controls are a thing of the past.”
The controls – limits on the flow of money and assets in and out of the domestic economy – were imposed in 2015 shortly after the radical leftist Syriza government took power amid the country’s sovereign debt crisis.
A dispute with the European Union and other lenders over economic reforms saw the European Central Bank (ECB) halt emergency funding to Greek banks, causing the government to close them and limit ATM withdrawals.
By October 2018 the cap on cash withdrawals had been lifted but some limits on transferring money abroad stayed in place.
Today’s move by the conservative New Democracy government comes as part of its attempts to improve investor confidence in the country, which has the highest borrowing costs in Europe.
Its government debt is currently rated below “investment grade” by the world’s biggest credit ratings agencies.
Finance Minister Christos Staikouras said: “Today a destabilizing factor, an instability factor for the banking system is lifted.” He said the controls would be lifted on 1 September.
His party was elected in July after four years of Syriza government that saw the left-wing party clash with investors and the EU before imposing a severe austerity programme.
The Greek economy is around 20 per cent smaller in 2019 than it was in 2007, when the global financial crisis began.
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Earlier this month, official figures showed that unemployment stood at 17.2 per cent in May, while youth unemployment was 33.8 per cent.