Submitted by Tyler Durden – ZeroHedge
Now that Greece and the Eurogroup are back on the same page and “cooperating” to use a game theory term, and any attempts of Eurozone “defection”, pardon the pun, by the Syrizia government have been postponed until the 4 month bailout extension runs out in June when the entire charade is set to repeat, it is critical for Greece to undo the mess that the Troika did when heading into the mid-February negotiations, the ECB did everything in its power to foment a massive bank run by spooking both banks and citizens that their funds may be Corzined, or otherwise capital controlled, thereby crushing any negotiation leverage the Tsipras government may have (just as we had laid out previously).
What we do know, is that it didn’t take much, and sure enough in the month of January, Greek banks suffered the biggest deposit outflow in both absolute and relative terms in Greek history.

One can only guess how bad it must have gotten in February, when rumors of €1 billion daily outflows were a daily occurence, and when even the likes of Stratfor reported (incorrectly as per official denials) that one of the largest Greek banks, Piraeus had run out of cash into month end.
As a result, everyone in Greece is now in full-blown confidence rebuilding mode in a desperate attempt to restore some of the deposit outflows, which have pushed total Greek deposits back to 2005 levels, even though nothing has been resolved vis-a-vis long-term Greek sustainability. As the WSJ reported late last week, “according to one senior banking official, more than €800 million ($905 million) in deposits have been put back into the Greek banking system since Monday when Greece’s banks were closed for a public holiday. “We saw €700 million return on the first day and another €150 million yesterday,” the banking official, speaking on the sidelines of central bank conference, told journalists.“Things are going well.”
Maybe, or maybe this is just yet another attempt to play off the public mood, because while as recently as 2 weeks ago the western media was desperate to see lines in front of Greek ATMs to accelerate the Greek government’s folding to the Troika’s demand (which ultimately happened), now it is just trying to talk back some of these destructive, confidence-crushing innuendos. Continue reading →
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