The European Central Bank wants Greece to put a daily cash limit on withdrawals to stop the bleeding from banks by depositors fearful the country’s battle with lenders could lead a Eurozone exit.
Bank customers are yanking out as much as 500 million euros a day and more than 15 billion euros had fled from accounts in the first six weeks of the year.
The German newspaper Frankfurter Allgemeine Zeitung (FAZ) reported the ECB, which agreed to only a modest increase in emergency funding for Greek banks, wants the controls implemented, putting pressure on the government to strike a deal over debt relief with the Eurozone.
“The ECB Governing Council and the ECB banking supervisor would be more comfortable if there were capital controls to prevent the banks bleeding (money),” the FAZ quoted an ECB source as saying.
The FAZ is a conservative German newspaper, which often takes a stance similar to that of the Bundesbank. The ECB declined to comment on the report.
Germany is the biggest contributor to 240 billion euros ($272 billion) in two bailouts for Greece from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that came with harsh austerity measures.