Apparently (1, 2) Greece is running out of cash right now. I am wondering where the cash went.

One option that I can image is people withdrawing funds and taking them out of the country but this cannot be the core of the problem, can it?

The other possibility would be people just withdrawing money and saving it but eventually the money will have to be spend because people need to buy things so the problem might solve itself?

What am I missing here?


2 Answers 2


Relaying from @lumi's answer to this question (not a duplicate though) we see that


As @lumi writes

..."if we look at the Greek money supply figures, and we know that that there are essentially three ways for liability deposits to decrease as shown - loan repayment, loan write-off and cash withdrawals, we can deduce pretty easily that Greece is experiencing a massive outflow of cash. We can assume that some of it is cash withdrawals particularly recently, but some of it also debt repayment to debt owners outside of the Greek banking system."

For the last months, I would increase a bit the emphasis on "people withdrawing funds and taking them out of the country".


I am not 100% sure what you are asking, but the shortage of cash this month in Greece is due to the closing of banks and prevention of most banks transaction.

When, middle/end of June discussions looked like there would be no agreement, and that a Grexit would probably be the only way out, people went to withdraw their money from their bank account. As a possible Grexit would imply a change of currency, combined with a rapid devaluation. That would make the value of banks accounts quite uncertain. People prefered to withdraw to be on the safe side.

However, to prevent a total collapse of their banking system, the government had to try to prevent the huge amount of money getting out of the banks. Their first measure was to limit the amound of cash that can be withdrawn: 60€/day for each inhabitant. The inhabitants being skeptic, tend to accumulate that money at home (not all flee outside).

However that doesn't prevent bank transfers towards foreign countries (probably favoured by high/middle class members). So they also stopped that. As a consequence, cash is the only mean of payment in Greece, even for salaries. Which amplify the need for the Greeks to collect cash with themselves to pay employee's income, food, and all kind of services that are needed and that can't be paid for with alternative means (credit cards, check, transfers, etc.).

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    $\begingroup$ so in essence they shot themselves in the arm to save the foot. $\endgroup$ Commented Jul 8, 2015 at 18:29

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