Exclusive: Deposit withdrawals surge at Greek banks as debt noose tightens

By Lefteris Papadimas and George Georgiopoulos ATHENS (Reuters) - Greek savers have pulled about 2 billion euros out of banks over the past three days, with the pace of outflow accelerating rapidly since the collapse of talks at the weekend with creditors, three banking sources told Reuters on Thursday. The spike in withdrawals piles yet more pressure on Greece's battered banks and provides new evidence of the hit to the financial system and broader economy from deadlocked negotiations between Athens and its euro zone and IMF creditors. The 2 billion euros taken out by savers between Monday and Wednesday represent about 1.5 percent of the total household and corporate deposits of 133.6 billion euros held by Greek banks as of end-April. Prior to this week, withdrawals had been running at 200-300 million euros a day. A spokesman for the Greek central bank declined to comment on the figures, saying it releases data on deposits on set dates every month and would publish data for May on June 26. Greek savers have been steadily pulling money out of banks since October but the latest spike came after talks between Greece and its euro zone and IMF creditors on an aid-for-reforms deal collapsed over the weekend in Brussels. That has left Athens on the verge of a default at the end of the month and raised the possibility that the government may have to impose capital controls. Athens has repeatedly denied it will resort to capital controls. "The next two weeks are very very crucial for the country and the banks," one of the Greek banking sources said. "The government should secure an agreement as soon as possible". Greece faces a 1.6 billion euro bill to the IMF on June 30 that it is not expected to be able to pay without a deal with its creditors. Euro zone finance ministers were meeting in Luxembourg in the latest attempt to reach a deal, but any expectation of a breakthrough there had all but vanished with Athens ruling it out as a forum to discuss new proposals. The ongoing crisis has prompted an outflow of deposits of about 30 billion euros ($33.84 billion) from Greek lenders between October and April, the central bank says. Unlike mass withdrawals in 2012 when Greece last flirted with bankruptcy, Greeks are keeping most of the money that has been withdrawn at home rather than sending it abroad, the central bank said in a monetary policy report on Wednesday. "The ratio of deposit flight abroad over the total drop in deposits in the last months shows that a larger percentage of outflows is staying in the country," the central bank said. (Writing by Deepa Babington; editing by Janet McBride)

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