I am reading that there was a meeting between
executives from the Greek Banks and the Vice President of the administration,
of the Greek government in the absence of liquidity.
The purpose of the meeting was a discussion on the
liquidity strains and its consequences in the market, in businesses, and the
banking system, as cash outflows in deposits continues. One measure that seems
very likely to be enforced is the use of credit cards for sales over 70 euros
to combat tax evasion from value added tax. This will be one of the measures
that seem to have been agreed upon, in the imminent (??) agreement with Greece’s
creditors. The measure is to be applied to Greek islands with population up to
4,000.
Another undesirable measure discussed at the meeting
was to impose capital controls. Capital controls is a measure imposed by central
bank or government, to limit the flow of foreign capital. This is a measure
most developed countries can use where capital reserves are low and most
susceptible to volatility.
The measure (if imposed) is subject to debate, as was
in cases where the former finance minister admitted to having moved money out
of the Greek banking system.
Bill T. Alexandratos
