How capital controls are affecting daily life in Greece

More than two weeks after capital controls were introduced, the banks remain closed, pharmacies are short on supplies and Greeks’ online purchases are restricted.

Banks

Greek banks have been closed for more than two weeks and are not due to reopen until Monday at the earliest. Under credit controls introduced by the government, daily ATM withdrawals from Greek bank accounts are limited to €60. Some cash machines run out of €20 notes at certain points during the day, in effect reducing the limit to €50. Greeks can make online transfers within the country and can pay with their cards in shops, but some businesses have begun to insist on cash.

Greeks are also unable to make online purchases overseas as this would count as "currency export", which the capital controls are partly designed to prevent. This means Greek bank account holders cannot buy on Amazon, use their cards abroad or book flights with many foreign airlines.

Even if the banks are opened soon the capital controls will remain in place for at least another two months, according to the economy minister.

Pharmacies

Pharmacies have been badly hit. Many have had problems ordering prescription medicines as some distributors have imposed limits on orders or have begun demanding cash upfront. The sight of empty drawers and cabinets, and a general fear about the future of the economy, have resulted in customers stocking up and hoarding, which has made matters worse. On Tuesday the health ministry decided to ban the export of 25 types of drugs following supply warnings. The problems could not have come at a worse time for pharmacists. The Greek state is 3½ months behind in reimbursing them for prescriptions.

Pensions

Pensioners without an ATM card have been particularly affected by the bank closures. Their only option has been to visit one of the 1,000 or so branches that were subsequently allowed to open to cater for them. A withdrawal limit of €120 applied in the first week, and was renewed in the second week.

Tourism

The foreign tourism sector has been shielded somewhat from the worst effects of the capital controls. Restrictions on withdrawals do not apply to foreign bank account holders, and many tourists say they barely see the effects of the crisis on the Greek islands.

However, the Department of Foreign Affairs has urged those travelling to Greece to bring adequate cash. In an update to its travel advice, the department said banking services, including credit card processing and ATMs, could become limited at short notice.

Irish travel agents have not reported significant numbers of customers forfeiting their money by cancelling booked holidays. However, an estimated 70 per cent of bookings made by Greek tourists have reportedly been cancelled.

Shops

Despite a number of articles in the foreign press claiming supermarket shelves are empty, a visit to any shop reveals this to be unfounded. In the first week of capital controls many supermarkets reported a spike in turnover due to panic buying and hoarding. Last week the same shops said sales were down as the situation normalised.

However the picture in the retail sector has been mixed. According to the national retailers’ association, sales of food and petrol jumped 30 per cent in the 10 days around the introduction of capital controls while all other retail sectors saw a slump of 70 per cent. As many consumers are limiting their spending to food and other essentials, some clothing outlets have slashed prices in an attempt to boost flagging sales. Fearing that a debt writedown might wipe away some of their unreachable bank deposits, many consumers are taking advantage of those offers by using their bank cards.

Transport

After the imposition of credit controls, long queues formed at many filling stations in Athens and some other cities as motorists feared the measures would mean petrol shortages. Those queues quickly dissipated after the country’s biggest refinery assured customers of supply and made arrangements for filling stations to buy fuel in cash.

Salaries

Capital controls have meant many employees are now being paid in cash rather than the usual bank transfer. In some workplaces wages are being paid in two instalments, at the beginning and middle of the month.

There have also been reports of companies requiring staff to take compulsory or unpaid leave due to the decline in business.

Civil service salaries have been paid as normal by bank transfer. However, the payment of welfare benefits by Athens city council has been delayed because the necessary funds have not been transferred from the interior ministry. Yet for the many thousands of employees who are already owed months in back pay by their employers as a result of the crisis, the capital controls have made no real difference to their workplace situation.