Greek depositors have moved some of the money they have withdrawn lately from Greek banks into Turkish banks, as market concerns deepen that the debt-ridden country, which faces general elections June 17, will eventually exit the euro area, according to Turkish media.
An estimated sum of between 300 and 400 million euros of deposits has been transferred to Turkish banks, according to a report by daily Star, citing unnamed officials.
The officials conducted research after Aleka Papariga, the leader of the Communist Party of Greece, claimed that Turkish banks were also exposed to risks stemming from the Spanish economic crisis, as the banks had 40 billion euros worth of Spanish bonds. According to the results of the research, the backdrop of this warning was concern over “whether the money withdrew in Greece fled to Turkey.”
Among the first depositors to transfer their money to Turkey were people who had migrated to
Greece and who had links in Turkey, Star said.
Greeks pulled about 800 million euros out of the banking system between May 7 and 14, President Karolos Papoulias said on May 16. There was an unidentified approximately $12.4 billion inflow to Turkish economy in 2011, which many analysts believed were from Syria and other Arab Spring countries. During the first four months of the year the figure amounted to $2.8 billion.
Turkey’s total financial exposure to Portugal, Ireland, Italy, Greece and Spain is $760 million, as of the end of 2011, according to the Central Bank’s balance of payments data.
Central Banks check their safes
Central banks from Tokyo to London checked their ammunition on June 15 in preparation for any turmoil coming from Greece’s election, with the European Central Bank hinting at an interest rate cut and Britain set to open its coffers, Reuters reported on June 15.
Tensions were high about how to manage the eurozone’s debt crisis -- epitomized by Greece’s bankruptcy and need for international aid -- and a rare fight broke out between Germany and France, normally the glue keeping the bloc together.
Officials from the G-20 group of nations, whose leaders are meeting in Mexico next week, say numerous central banks are preparing to take steps to stabilize financial markets by providing liquidity and prevent any credit squeeze if needed.
European Council President Herman Van Rompuy convened a conference call on June 15 afternoon with the leaders of Germany, France, Italy and Britain, officially to discuss preparations for the G-20 summit, expected to be dominated by the eurozone debt crisis.
Depending on the depth of any turmoil, an emergency meeting of ministers from the G-7 group of developed nations could be held on June 18 or June 19 during the summit in Los Cabos, Mexico, Reuters quoted sources as saying.
Fitch ratings agency warned on June 15, two days before key elections in Greece, that a Greek exit from the eurozone could affect the ratings of regional and local authorities across the eurozone.
“In the event of a Greek exit from the eurozone, all Eurozone sovereigns would initially be placed on Rating Watch Negative,” Fitch said meaning that a credit rating downgrade could then be imminent.
“In that event, the ratings of about 120 local and regional governments” and public utilities across the eurozone would also be subject to an imminent downgrade.
Fitch stressed that the “magnitude of the impact” of a Greek
exit from the euro “would depend on each [eurozone] country’s specific sensitivity to the ongoing
crisis.” |
Source : hurriyetdailynews.com
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