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Rainy days for Greek banks Thanassis Stavrakis/AP/Press Association Images

Fears grow as Greeks flee banks

Up to €700m believed to have been taken out of banks as contagion sets in after disastrous Italian bond auction.

GREEKS ARE WITHDRAWING as much cash as they can ahead of this Sunday’s election, according to reports.

According to Bloomberg, up to €700m was taken out yesterday, up from €100m a day last month. Outflows “could accelerate the sequence of events leading to the emergence of a new currency,” said Thomas Costerg, an economist at Standard Chartered Bank in London.

Meanwhile Italy’s  one year borrowing costs rocketed today.

The country borrowed €6.5 billion with a 12 month bond  but had to pay more 3.972 per cent. A month ago, it paid 2.34 per cent.

Higher interest rates means governments have less money to spend on other areas, including essential services such as health and education.

Italy is denying rumours that it will follow Spain and seek a bailout.

However, the sale “underscores the externally driven deterioration in Italy’s perceived creditworthiness” one analyst told The Guardian.

Greece has money to pay bills until 20th July>

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