It is just the headache Greece’s government does not need right now: how can it loosen the capital controls that are shielding its banks, but strangling the rest of the economy?
For the past month, Greece has been financially cut off from the rest of the world. It is almost impossible for most Greeks to take money out of the country, thanks to a raft of capital control measures put in place on June 29 amid fears of a catastrophic bank run.
For companies, the capital controls have meant waiting for a government commission to sign off on large bills owed to foreign firms — a process that has slowed payments so much that distrustful suppliers started asking to be paid in advance.
Bank of Greece chief Yannis Stournaras on Friday loosened the restrictions to allow banks to greenlight companies’ foreign payments up to 100,000 euros ($110,000).