Bank access to bailout cash limited
Greek banks will have restricted access to bailout funds until a fresh injection of equity to recapitalize them several months from now is approved, sources told Reuters yesterday. An initial 10 billion euros will be made available “immediately” to shore up confidence in Greek banks, but it will be placed in a restricted account, at least until a “stress test” is finished by the middle or end of October, they said. The European Stability Mechanism – which provides financial assistance to euro area member states experiencing financing difficulties – will be responsible for distributing this cash, if banks fall short of minimum capital requirements. But no disbursement is expected for now as banks are seen maintaining adequate capital until the full 25 billion euros outlined in the rescue package agreed between Athens and its in- ternational lenders are available, one source said. Greek banks, closed for much of July, have been kept on a lifeline by the European Central Bank and are limiting cash withdrawals to a weekly 420 euros per customer to prevent a run. But they have built up a 5-billioneuro liquidity buffer thanks to capital controls, indicating confidence is returning. “When the full recapitalization of banks is fulfilled it will have a major impact for the economy,” one of the sources said. “We know that there is around 40 billion euros in cash under the mattresses in the real economy and that money could come [back to the banks] very very quickly.”
Building activity in May, as measured by the number of permits issues, saw a small rise of 1.9 percent after larger increases in the previous months. Overall this year, there has been a 6.1 percent rise in the number of permits issued compared to 2014, 13.4 percent when measured by surface area and 16.6 percent in terms of volume.