EU breakup imminent: Talk of limiting ATM withdrawals, halting flow of money across borders

Posted on June 15, 2012


Among the measures currently under consideration is placing a limitation on the amount

English: Various Euro bills.

of money Europeans can withdraw from automatic teller machines (ATMs), as a way to prevent rushes on, and collapses of, European banks which are already scrambling to remain viable.

Perhaps the nation most likely to abandon the euro first is Greece, with its citizens set to vote Sunday on new leaders who seem bent on bailing out of the euro and returning the country to the old drachma currency. This week, ahead of the vote, Greeks are withdrawing about 800 million euros ($1 billion) a day out of major banks, while using at least some of their money at local grocery and retail stores to stock up on supplies in fear of a total collapse.

At issue is whether Greeks want to accept tough austerity measures imposed upon it by the International Monetary Fund and EU as part of a bailout deal to rescue the economically failing country. Euro-zone analysts have said many Greeks want to have things both ways – they want the IMF and EU to pour hundreds of billions in cash into the country but they don’t want to accept measures aimed at fixing the country’s economic problems. Some of those measures have included salary and pension cuts which have forced many Greeks into “abject poverty,” Reuters reported.

European Commission (EC) officials are developing worst-case scenarios should Greece decide to dump the euro; besides limiting ATM withdrawals, officials are considering imposing “border checks and introducing euro zone capital controls,” the Irish Timesreported.

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