Greece’s neighbours take measures to shield their banks & economies

Macedonia tells lenders to withdraw deposits from Athens

SKOPJE, June 29, (AFP): Greece’s regional neighbours took measures Monday to protect their banks and economies from the escalating financial crisis there and the possibility of a Greek exit from the euro.

Athens on Sunday announced capital controls following a collapse in bailout negotiations with its creditors, which will see banks closed temporarily and international transfers vetted.

In Serbia, the central bank said it had put into place temporary measures on banks with Greek owners.

The measures include “additional controls and transaction limits between branches in Serbia and their parent banks in Greece,” it said in a statement.

“The goal of these measures is to prevent negative effects on the Serbian banking sector” from the crisis in Greece, the National Bank of Serbia said.

It declined to provide details on the measures, including their duration.

Meanwhile, Macedonia ordered its banks to pull back their deposits from Greek banks.

The Macedonian central bank also imposed restrictions limiting the outflow of capital to Greece.

“Macedonian banks are required to withdraw all loans and deposits from banks based in the Republic of Greece and their branches and subsidiaries in the Republic of Greece or abroad,” a Macedonian central bank (NBRM) statement issued Sunday said

The NBRM said it is also imposing restrictions halting the flow of capital from the country to Greece on “newly concluded capital transactions”.

The NBRM described both measures as preventive action applicable for a maximum of six months.

“These protective measures are temporary and were taken to cope with a possible major outflow of capital from Macedonia to its northern neighbour, that could provoke a perturbation in the balance of payments and stability of financial system,” it said.

The central bank’s decision came after Greek Prime Minister Alexis Tsipras announced that the closure of banks for a week and the introduction of capital controls.

Bulgaria for its part has not taken any special measures, with the central bank insisting the country is insulated from the Greek crisis, including banks with Greek shareholders, which account for a fifth of Bulgaria’s banking industry.

“The Bulgarian banking system, including banks with Greek shareholders, is completely independent financially and operationally from the banking systems of other countries,” the Bulgarian National Bank said in a statement.

It added that banks with Greek shareholders had sufficient cash flow, and had above-average levels of liquidity and capital adequacy, which guarantees their “stability and independence from negative developments in other countries”.

The governor of Albania’s central bank, Gent Sejko, said the crisis would have an impact on the country’s economy.

“The Greek crisis will have a negative impact on exports and remittances from the diaspora, but that is nothing new, Albania is exporting less and less and remittances from Albanians working in Greece has been declining for several years,” he said.

Meanwhile, Argentina, which defaulted on a mountain of debt more than a decade ago, expressed solidarity with Greece Monday as it inches toward missing a critical debt payment.

Greece’s woes are sending ripples through stock markets around the world and prompting worries the country may be headed toward abandoning the euro.

A senior Argentine official defended the Greek prime minister’s idea of holding a referendum next Sunday on austerity measures that its creditors are now demanding in exchange for more bailout money.

Anibal Fernandez, chief of the Argentine cabinet of ministers, said the long-running Greek crisis was caused by previous austerity measures that the IMF demanded from Athens.

Argentina has been in the same boat, he said. The country defaulted on 100 billion dollars in debt in 2001, and in recent years has fought bitterly in the courts with investors who bought up some of that debt at fire-sale prices.

Fernandez said Greece should keep an eye out for such investors, which the Argentine government likens to predators and calls “vulture funds.”

Investors “are waiting for things to turn out the exact same way for Greece, so they can start preying on them just as they have with everyone,” Fernandez told a news conference.