Greece Relaxes Capital Controls

Greece - Early Years of a Young Nation(Greece) – Now that confidence in the economy is starting to improve somewhat, Greece has decided to relax on its capital restrictions on its banks. People appear to have some confidence restored in the banks, which has led Greece to pass legislation which eases some of the former restrictions. These controls were put into place last year as the government was concerned that people would take out too much money at once, so they placed daily restrictions on the amounts of withdrawals people could do.

This easing of these restrictions have occurred because the country has made progress concerning the reforms that the international creditors have required of the country in order to be approved for the third bailout. Now that they were approved, they need to make good on the promises made and implement the reforms. Since they have done that, the country feels as if they can ease some of the capital controls.

The capital controls were necessary last summer as the country was in talks for its second bailout since 2010. On top of that, the government was facing reelections. During the time of last year’s bailout talks, Greece came very close to getting pushed out of the Eurozone. Over the past year, the controls have been eased at a fairly slow rate.

According to the decision by the administration, the limit was changed from 420 euros every two weeks to 840 euros every two weeks. In addition to that, people will be able to take out money for loan payments and restrictions were lifted for withdrawals made in order to make deposits. Greece also raised the withdrawal limit to 30% of the amount transferred from foreign to Greek banks. Prior to this legislation, the amount was 10%. The Bank of Greece announced that the country’s lenders also approved this current legislation.

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