Mat­tress cash used to pay taxes

Tax­pay­ers tapped over 5 bil­lion eu­ros stored in homes or safe de­posit boxes to cover their obli­ga­tions

Kathimerini English - - Focus - BY EV­GE­NIA TZORTZI

Money has been dug out from un­der mat­tresses to pay a large part of cit­i­zens’ tax pay­ments in the lat­ter part of this year. This amount is es­ti­mated at around 5 bil­lion eu­ros and it is the fig­ure by which the phys­i­cal money cir­cu­lat­ing in the mar­ket has been re­duced, as recorded by the Bank of Greece.

Cen­tral bank data show that cash in cir­cu­la­tion (i.e. not de­posited in bank ac­counts) had de­creased at the end of Oc­to­ber to 43.8 bil­lion eu­ros from 49 bil­lion at end-Oc­to­ber 2015.

If one deducts from that amount the 29.3 bil­lion eu­ros that the Euro­pean Cen­tral Bank dis­trib­utes in the form of ban­knotes and which is in Greek peo­ple’s pock­ets, then the re­main­ing 14.5 bil­lion is the money stored in safe de­posit boxes and un­der mat­tresses. This fig­ure has fallen 6.5 bil­lion eu­ros within one year, from 21 bil­lion in Oc­to­ber 2015.

The amount of cash out­side of the banks soared in 2012, the year of great un­cer­tainty and the twin gen­eral elec­tions: It came to 22.3 bil­lion eu­ros then, but as the un­cer­tainty be­gan to re­cede it grad­u­ally dropped to just 4 bil­lion in Novem­ber 2014.

When the snap elec­tions were called a month later, the fig­ure started grow­ing again to peak at 22.8 bil­lion eu­ros in June 2015, the month which ended with the in­tro- duc­tion of cap­i­tal con­trols. The money that flowed out of banks from De­cem­ber 2014 to June 2015 was stashed away in safe de­posit boxes and in peo­ple’s homes.

The fig­ure then sta­bi­lized for al­most a year be­fore start­ing to de­cline again in June this year when the in­come tax dues were con­firmed. It has been drop­ping by about 1 bil­lion eu­ros per month. With de­posit bal­ances re­main­ing more or less the same in re­cent months, it is clear that 632.52 1.0602 the huge amounts of money needed for the pay­ment of in­come tax and the Sin­gle Prop­erty Tax (ENFIA) since July have come from safe de­posit boxes and mat­tresses.

The lift­ing of con­trols this sum­mer on the new money en­ter­ing bank ac­counts has not helped Greek de­posits grow, as they re­main at the his­toric low of 102.2 bil­lion eu­ros. The rea­son is that the un­cer­tainty con­tin­ues to con­cern the mar­ket and the coun­try.

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