A substantial easing of the capital controls that were imposed in 2015 is expected by summer, if a series of preconditions are met.
The preconditions include stronger indications of an economic rebound, successful bank stress tests, successful completion of the third and fourth bailout evaluations, and determination of the new fiscal oversight framework by creditors.
During the period of the crucial stress tests, which will be conducted between February and May, the Bank of Greece will not risk an easing of capital controls, as a possible dissemination of rumours about the condition of private banks could lead to capital flight.
The government is expected to agree to the parameters of post-memorandum oversight by summer, which in turn is expected to lead to a drop in the interest rate of Greek bonds and an increase in bank deposits, spurred by tourism revenues. That opens the way for the public sector and banks to return to the markets.
A key parameter in determining the easing of capital controls will be the ability of banks to reduce the number of non-performing loans.
If all of the above proceed smoothly, the European Central Bank is expected to approve the lifting of many restrictions, with a total lifting of capital controls projected for 2019.
In the interim, if the third evaluation formally closes smoothly this month, there will be measures before summer to ease certain controls for Greek businesses, such as facilitating exports, while measures pertaining to individual depositors are expected within the summer.
Those measures will include a gradual lifting of restrictions on opening new bank accounts, a gradually raising of the ceiling for ATM cash withdrawals, a raising of the ceiling for purchases from abroad (with a credit card or debit card), and finally an increase in the amount of cash one can wire abroad.
Agis Markou
