Toll of Capital Controls in Greece a Year Later

Capital controls, which have been applied in the summertime of 2015 amid Greek political havoc and eurozone uncertainty and restricted entry to private deposits, are nonetheless with us a yr later.

Regardless of reassurances that the controls can be lifted, they continue to be in place limiting the entry of Greece’s residents and entrepreneurs to their financial savings. The losses within the meantime are appreciable.

Indicatively, in 2015 the GDP closed with a marginal drop as a substitute of an anticipated 2.5-3 p.c progress. Recession in 2016 is predicted to exceed 2 p.c. The decline of unemployment got here to a halt with the speed now ranging barely under 25 p.c and anticipated to rise above that by the top of the yr. The banking system is working via eurozone assist with 4 main banks having misplaced 25 p.c of their prospects’ deposits within the first six months of 2015. Greater than 25,990 companies have been pressured to close down from mid-2015 so far in opposition to 3,000 new enterprises arrange. Exports have declined by 11.7 p.c. Investments have dropped by 3 p.c. Consumption has fallen by 4.3 p.c and Greece has plunged to the 56th spot in competitiveness amongst 61 international locations.

A yr later, the imposition of capital controls finds Greece in a tragic predicament. The nation continues to face evaluation after evaluation on the progress of its program by its collectors, banks can’t present assist or liquidity and depositors are veering away from returning their deposits.