EUObserver: Bulgarian Lev Makes Inroads in Greece

Southeast Europe | July 3, 2015, Friday // 11:24|  views

Sixty euros the daily withdrawal limit are seen in 20 euro notes during a withdrawal from an ATM machine at a bank branch in Athens, Greece, June 29, 2015. Photo by EPA/BGNES

Hotels and restaurants in Greece have started taking payments in the Bulgarian currency lev (BGN) amid a bank holiday and in view of a Grexit scenario, Brussels-based EUObserver reports.

A Bulgarian businessman named Rumen Galabinov is quoted as saying that in Thessaloniki ATMs have run out of cash and "nobody could withdraw even five euros".

Galabinov reportedly joked asking if payments are accepted in levs at a local restaurant, and the owner agreed.

He said Bulgarian guests to his restaurant and two hotels were welcome to pay in BGN, and then we would travel to Sandanski, a town in Southwest Bulgaria not far from the border with Greece, to exchange the money to have cash for daily supplies.

In his words, Greek businesses and private depositors could even start traveling to Bulgaria to withdraw money from Greek bank branches, which do not fall under the scope of the Athens central bank's capital controls.

This comes as the central bank in Athens imposed restrictions on ATM withdrawals, preventing Greeks from taking out more than EUR 60 a day.

The lev is described as a stable currency, given the ongoing currency board arrangements (the BGN is pegged to the EUR at a rate of BGN 1.95 for EUR 1) and the low debt-to-GDP ratio at 27.6% in 2014.

The businessman also warns that Bulgaria's exports to Greece, which plummeted to 6% of the total last year (down from 16-18% in the pre-crisis years), could be further hurt for the Greek bank holiday, which regardless of the outcome of the referendum will have its repercussions for some time.

You can read the full text here.

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Tags: ATM, greece, Rumen Galabinov, Sandanski, Grexit, bank holiday, capital controls, lev, euro


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