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Greek Economy Heading to a Meltdown

Aug. 3, 2015 (EIRNS)—Greece’s creditors have unleashed what is rapidly developing as a economic meltdown. Cutting liquidity to the Greek banking system and capital controls is collapsing the economy. The Greek stock market opened today after having been shut down for a month. Stocks collapsed by over 20%, with banking shares falling by 30%, in an nearly unprecedented collapse.

Share prices for Piraeus Bank SA and National Bank of Greece SA, the country’s two largest banks, dropped 30%, the daily maximum allowed by the Athens Stock Exchange. The benchmark ASE Index fell by as much as 23%.

The collapse is a direct result of capital controls that have been slapped on the Greek banks, and earlier on the stock market, under orders of the European Central Bank. The ECB continues to refuse to expand liquidity operations and is plotting to have a bail-in on the Greek banking system. There is open talk that deposits below €100,000 will also be bailed in.

Unable to fund their imported raw materials because of the capital controls, industrial firms have had to shut down. Greek manufacturers are only 20% self-sufficient with the 80% having to be imported which amount to more than €3.5 billion a month. Statistical data released on Monday showed manufacturing fell to a record low in July.