Greece fully lifts capital controls imposed during bailout chaos, says PM

Elias Hubbard
August 27, 2019

Greek Prime Minister Kyriakos Mitsotakis announced on August 26 the complete abolition of capital controls.

Capital controls were introduced in Greece in late June 2015 to avoid a run on banks and possible collapse of the banking system, while the previous government was negotiating the terms of a third bailout agreement with the country's eurozone peers.

Restoring the free movement of capital will help to strengthen trust, attract investment and open the way for a further upgrade of the Greek economy's credit ratings.

"From today, capital controls are a thing of the past", Mitsotakis told lawmakers in parliament.

Although gradually eased in recent years, the remaining restrictions had been interpreted as an impediment to the revival of an economy that had been bailed out three times since 2010.

Fears of a disorderly exit in mid-2015 prompted panicked depositors to make mass cash withdrawals while the leftist government led by Alexis Tsipras hammered out the terms of emergency funding from the European Union and International Monetary Fund.

The amendment foresees the full lifting of the last remaining limits on money transfers overseas.

Greece's prime minister says the country will soon lift the last remaining restrictions imposed on bank depositors more than four years ago at the height of the country's financial crisis.

"Capital controls were the heaviest punishment of entrepreneurship and, potentially, the toughest limitation on the country's economy", Korkidis said.

The opposition Syriza party accused Mitsotakis' ruling New Democracy of trying to take advantage of the issue on a communication level, while the reality is different.

"It marks a return to normality and growing confidence", Bank of Greece Governor Yannis Stournaras told Reuters.

Other reports by Click Lancashire

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