Greece could be bankrupt in days

Greece could be bankrupt in a matter of days, rather than waiting until the end of June deadline for its next IMF repayments, warns the chairwoman of Greece’s largest bank.

Louka Katseli, chair of the National Bank of Greece, told City AM that the country could default ahead of the deadline of the end of June, when Greece has to pay the IMF £1.14bn, if an agreement is not reached today.

Ministers convened in Brussels today to thrash out a last-minute deal and release bailout money for the country. 

“If an agreement is not reached, there is a risk this would mean the Greek state is considered to be in default, and this might come earlier than the end of the June,” says Katseli. “If the Greek state is in default then the Greek banking system is in default – this would be uncharted waters, it has never happened before.”

Experts also say the pace of deposits coming out of Greek banks may mean the government has to place restrictions on withdrawals. There were estimated to be £117.9bn of deposits in Greek banks in November, which has dropped to £95.7bn, according to the central bank.

However, JP Morgan estimates the remaining money to be closer to £85.7bn, with around £4.3bn having left Greek banks in the past week.

While any deal is coming down to the wire, Katseli says she thinks “sanity will prevail on both sides”.