EU plans ATM limit if Greece leaves euro

Limits on how much cash can be withdrawn from ATMs, border checks, and currency controls may be imposed if Greece quits the single currency.

The moves are among a raft of emergency options discussed by eurozone finance officials preparing for the worst should Athens be forced out of the euro.

EU officials said the drastic measures are part of a range of contingency plans, and emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen.

But with Greece holding its second emergency general election within six weeks this Sunday, political uncertainty in the country is causing alarm in Brussels.

Limits would be placed on how much could be withdrawn from Greek ATMs in a bid to try to contain the economic consequences of withdrawal.

The discussions have taken place in conference calls since early May as concerns have grown that a radical left coalition, Syriza, may win the election, increasing the risk that Greece could renege on its EU/IMF bailout and, therefore, move closer to abandoning the currency.

No final decisions have been taken, but members of the Eurogroup Working Group, which consists of eurozone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, sources said.

Belgium’s finance minister, Steve Vanackere, said last month that it was a function of each eurozone state to be prepared for problems. These discussions have been in that vein, with the specific aim of limiting a bank run or capital flight.

As well as limiting cash withdrawals and imposing capital controls, they have discussed suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the EU, though not Britain and Ireland.

EU officials are examining whether there is a legal basis for such extreme measures.

“Contingency planning is under way for a scenario under which Greece leaves. Limited cash withdrawals from ATMs and limited movement of capital have been considered and analysed,” a source said.

“The Bank of Greece is not aware of any such plans,” a central bank spokesman told Reuters.

The majority of Greeks — some surveys indicated 75%-80% — want to retain the currency. However, Syriza is expected to win or come a strong second on Sunday. Alexis Tsipras, the party’s leader, has said he plans to tear up or heavily renegotiate the €130bn bailout agreed with the EU and IMF. The EU and IMF have said they are not prepared to renegotiate.