Greece: Capital Controls in Greece

In Greece, capital controls were introduced at the end of June 2015 with the aim to hold the bank run, provoked by the instability of the political situation.The European Central Bank, froze the financial support towards the banks of Greece which resulted in the closing of the above-mentioned institutions and consecutively in the implementation of capital controls, whose purpose was the prevention of Greeks’ run to the banks. 

Capital controls can be broadly characterized as restrictions on capital transactions and comprised of three pillars: (a) measures to prevent outflows of funds abroad, (b) measures limiting cash withdrawals from banks and (c) measures to prevent the rapid decline of bank assets and liabilities (e.g. repayment of the remaining capital on bank loans). Despite these measures, there was no explicit restriction on the provision of credit by financial institutions. In addition, during the first phase of restrictions, all credit institutions operating in Greece, including branches of foreign banks, were forced to close until July 20, 2015, the Athens Stock Exchange remained closed and daily cash withdrawals were limited to a maximum of 60 euros per depositor per bank. No capital restrictions were applied to credit cards issued by foreign banks. Following the end of the bank holiday, certain transactions were approved, such as early redemption of time deposits and payment of tuition fees to foreign universities. To reduce the burden of documentation requirements, special subcommittees were established in each financial institution to approve or reject the transfer of funds abroad. The special subcommittees were responsible for the approval of transfers abroad under a certain threshold. Transfers larger than this threshold had to be approved by the central committee. 

The threshold of the total amount of transfers abroad by any individual firm was set initially at 100,000 euro per working day. This limit has been gradually increased to 250,000 euros by September 2015 and to 350,000 euros by July 2016. 

Almost three and a half years since the imposition of capital controls, Greek authorities announced that they are abolished for domestic transactions and further eased for transactions abroad. The last changes in the limit on withdrawals took effect on 1 October 2018. 

The provisions in the decision are as follows: 

• There are no longer be any limits on withdrawals via credit cards or pre-paid cards. 

• There is a 5,000-euro limit on withdrawal abroad, which includes withdrawals via credit cards and pre-paid cards issued in Greece. 

• The limit on the amount of cash carried by Greek citizens traveling abroad increased from 3,000 to 10,000 euros. 

• For businesses, the limit on the amount transferred abroad, in the context of their business activity, raised from 40,000 to 100,000 euros, per transaction, per client, per day. 

• There is no limit on the transfer abroad of profits on investments made in Greece. For sums from profits and dividends deriving from investments in Greece, depositors can transfer to a bank account in their name abroad 100 percent of the initial investment per year. The provision applies only to investors who wired the capital from abroad to a bank account that they maintain in Greece. 

• Payments or payment in full of cheques and letters of credit in cash are allowed. Until October 2018, they could only be deposited in a bank account.

‍