Western Union, the world’s largest money transfer company, said it was closed for business in Greece on Monday and would remain closed for at least the rest of the week.
Western Union said it had not seen a significant increase in customers moving money out of Greece in the two months to June 27 but had seen a rise in funds being moved into the country.
“Our inbound business is seeing an upswing and we will continue to monitor this closely as and when our business in Greece is operational once gain,” the company said.
“Due to restrictions imposed across the financial sector, by the government, our services are not available at this time,” Western Union said in a statement Monday afternoon.
The company said it would monitor the situation closely and restore services as soon as possible.
The Greek government issued new capital controls that, among other things, prohibit out-bound money transfers and limit ATM withdrawals to 60 euros, or the equivalent of $67.44 day.
The restrictions, designed to prevent a run on the banking system, are scheduled to last until after a Sunday referendum on new austerity measures that European Union and International Monetary Fund officials want implemented.
Greece, which faces a 25 percent unemployment rate domestically, will suffer if workers abroad can’t send money back, said Miles Light, a business research economist at the University of Colorado, who has studied the economic impact of remittances.
With banks closed, getting enough physical currency to various agent locations is a huge problem, Light said. “It is as much a logistical issue.”
The Greek cut-off, if extended, could prove especially problematic for foreign tourists. While their ATM withdrawals aren’t being restricted, they may find machines empty as locals rush to get the cash that merchants are increasingly demanding.
Sources: Reuters, Denver Post