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Banking fragility rooted in justice failures Evidence from Ukraine
Policy Contribution

TRAC: A market-based tax on capital flight as an alternative to Grexit

07 May 2015

TRAC: A market-based tax on capital flight as an alternative to Grexit

In this CEPS Commentary, Daniel Gros turns his attention to the main outstanding problem facing Greece today, namely capital flight. Fearful that the country will leave the euro, depositors are withdrawing cash from their bank accounts – thereby making this event more likely. He outlines a proposal in which outgoing payments from Greek banks in the form of cash or via the TARGET system would be limited to the amount of incoming payments, i.e. revenues from exports or tourism, via an auction system. Greece could remain formally a member of the euro area, but the price for cash withdrawals would encourage depositors to wait and stimulate exports.

Daniel Gros is Director of CEPS.

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TRAC: A market-based tax on capital flight as an alternative to Grexit
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