Greece Confiscates Citizens’ Cash to Cover Debt Obligations Posted by Brian Ford on April 22, 2015
In the latest twist in the Greek debt saga, government officials have ordered the country’s municipalities to hand over their cash reserves to the Bank of Greece. A 770 million euro payment, due May 12, is owed to the International Monetary Fund (IMF), and Greek officials have claimed that they have no choice but to confiscate citizens’ bank deposits to keep the nation from defaulting on the loan.
Local authorities have been vocally opposed to the confiscation order. “The government’s decision to seize our reserves not only raises legal and constitutional issues, but also a moral one,” said Glyfada mayor George Papanikolaou. “We have a responsibility to serve our citizens.”
While proponents of the government’s plan to seize funds held in banks believe the potential 2 billion euro windfall could significantly help Greece with its “extremely urgent and unforeseen needs,” citizens and municipal leaders remain unconvinced. “It is a politically and institutionally unacceptable decision,” said Marousi city mayor Giorgos Patoulis. “No government to date has dared to touch the money of municipalities.”
The funds to be seized were originally meant to pay the salaries and pensions of Greek workers, so the move to reallocate the money has sparked concern among other countries’ citizens that their respective governments could decide to “repurpose” their savings for government use.
Such occurrences, while rare, are not unheard of.
In 1933, the U.S. government outlawed the private hoarding of gold because the metal was needed by the government to pay debts and add respectability to the dollar. In 2008, Argentina seized citizens’ pension funds. Other countries that have made similar moves in recent years include Cyprus, Hungary, Ireland and Poland.
Many people choose to protect themselves from government intrusion into their personal finances by buying physical gold and silver that can be stored privately. For more information on protecting your assets with precious metals, call the Certified Gold Exchange at (800) 300-0715 for your free gold and silver investing guide, and enter your email below to sign up for regular gold and silver market updates.