With the clock running down on Greece’s chances of avoiding a painful exit from the euro, the country got a temporary lifeline Friday to help it cope with a bank deposit drain and turned its hopes to a European leaders’ summit next week.
The European Union president warned the situation was “getting critical” as Greece approaches a deadline on June 30, when it has to make a debt repayment it cannot afford without more loans from creditors.
Uncertainty over whether Greece might default on that payment — something that could lead to the country eventually falling out of the euro — increased after a meeting Thursday ended in discord over what reforms the country should make to get more loans.
Several European countries are now openly saying they are getting ready for the possibility that Greece might leave the euro.
“The game of chicken needs to end and so does the blame game,” EU President Donald Tusk said in a video message.
“We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continued support or to head towards default.”
In the streets of Athens, there were no visible signs of distress or larger than usual lines at banks or supermarkets. Officials, however, signaled an increase in withdrawals and transfers, which can also be made electronically.
An EU official said Greeks had taken about 2 billion euros ($2.3 billion) out of their accounts in the last three days.
“Money is going out of the Greek banks faster than at any time before,” said the official, who spoke only on condition of anonymity because of the sensitive nature of the situation.
As a result, the European Central Bank’s governing council decided to provide more emergency credit for Greece’s banks to help them cope with the situation.
A Greek banking official, who spoke on condition of anonymity because the announcement was not made public, confirmed the decision. The official declined to give a sum.
The ECB has been steadily increasing the support it allows Greek banks to draw on. It’s not thought it would turn off that tap until it thinks Greece is definitely going bust, and certainly not before an emergency summit of the eurozone’s 19 leaders on Monday.
However, if no deal emerges with creditors soon that will allow the country to pay upcoming debt payments, starting with one at the end of the month, the ECB would be under intense pressure to stop pumping money into a banking system that might collapse.
