Fearing losing their savings, Greeks go on spending spree

Could 'haircut' tax raid deposits?

Smart card super macro , credit card chip

Scared that their money will vanish, Greeks are reportedly embarking on a credit card spree, buying up everything from jewellery to iPhones.

Believing that the EU could impose a 'haircut' tax on bank deposits, they're attempting to turn their money into something more tangible and keep it out of the taxman's hands.

"We have sold so much," sales assistant at an electronics store Despina Drisi tells the New York Times. "We even sold display models. People have been pulling at my sleeves. We're spacing things out now to cover the holes on the shelves."

And there's similar demand for jewellery, shop owner Maria-Ellie Xanthopoulous tells Mail Online.

"For the past six months we had almost no customers, but on Saturday, Monday and Tuesday we had a number of clients come in and spend money," she says.

"One or two of my clients said they would rather spend their money on beautiful things that let the banks take it away from them."

Earlier this week, Greek junior finance minister Dimitris Mardas refused to rule out a bank account haircut, such as the EU imposed on Cyprus two years ago. Then as part of a bail-out deal, residents and businesses were forced to pay up to 47.5% of bank deposits above €100,000.

Cash remains in short supply, with long queues at ATMs and withdrawals limited to €60 - although even this doesn't always apply in practice.

"We are supposed to be able to withdraw €60 a day but there are no €20 notes left in the machines so you can only take out €50," one bank account holder told Mail Online. "It is the same everywhere – there are only €50 notes in the ATMs."

Louka Katseli, the head of the Hellenic Bank Association, yesterday said the banks are believed to have enough cash to last until Monday at least, in an interview with Greek television station Mega.

She also played down the likelihood of a haircut tax.

"At the moment there is no issue of a haircut on the table," she said.

But, she warned, "The sooner the banking system starts operating normally, the smaller the chance of any type of haircut. The issue of a haircut is related to the solvency of the banks."

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