It’s no news that Greece owes €400 billion to the International Monetary Fund, the European Central Bank and other centralized banks. In effect they’ve been living off money borrowed from Germany and the other strong European economies. They have the opportunity to borrow more from the European banks, but they don’t like the conditions that come with the loan, so they turn down most offers.
This could result in Greece dumping the Euro and going back to Drachmas. Literally every Euro a Greek has in the bank will be decreed to be Drachmas – one for one. But that happens the markets will immediately devalue the Drachma by 50% – 80%. For every €100 in the bank, the owner will suddenly have just 20 Drachmas! So as an American tourist visiting Greece here are some things you should know about the banks in Greece.
- You should always have cash with you
Starting on Monday, banks in Greece were closed, and ATM withdrawals were being limited to €60 (around $67) for cards issued by Greek banks. Withdrawal restrictions don’t apply to foreign cards, but many ATMs have reportedly already been emptied and have no cash to dispense. The advice of the U.S. Embassy in Greece is that Americans Tourist visiting Greece should have plenty of cash, and should certainly not rely on any single form of payment: “U.S. citizens are encouraged to carry more than one means of payment (cash, debit cards, credit cards), and make sure to have enough cash on hand to cover emergencies and any unexpected delays.
- Expect Long Lines and Possibly Huge Delays
Since going in to the banks might be stressful due to the crowd and many people trying to withdraw their money. There have already been huge lines at ATMs and supermarkets, with worried shoppers stocking up on essentials in the same way that Americans hoard milk and bread when a big snowstorm is in the forecast. There has also been plenty of speculation that strikes, demonstrations, and a squeeze on fuel could cause travel disruptions within Greece.
- Will I be Able to Use Prepaid Currency Cards or Travelers Cheques
You can load your currency cards with a foreign currency at a pre-agreed exchange rate and used in shops or at ATMs whilst abroad without incurring commissions or transaction fees. And also gain, smaller shops might start to be reluctant to take them, although they are still fully functioning. Also remember that Traveler’s cheques are not widely accepted so it would not be advisable to rely on them as the only source of payment. Even Western Union, the world’s largest money transfer company, now allows transfers into the country but the withdrawal limits from Greek bank accounts still apply.
- Specific Warning About Bank Closure
The specific warning about potential bank closures echoes similar advice issued in the US and Australia. Germany and the Netherlands have also issued similar advice after the European Central Bank capped emergency funds to the country before a referendum on the terms of a bailout.
It is advisable that once people arrive in Greece they should use safes and deposit boxes to store cash and split money between family members so that no individual was carrying too much around with them.