Greek savers withdrew €12.2 billion (£8.9 billion) from their accounts in January amid fears over a standoff between Athens and its European partners, according to new central bank data. The outflows underline the pressure that the Greek authorities have been under to reach a deal before the funding problem for its banks became too acute. At the start of February the ECB withdrew a waiver that allowed Greek banks to access loans from the central bank using government bonds and government-guaranteed assets as collateral, forcing the institutions to rely on Emergency Liquidity Assistance (ELA) provided by the Bank of Greece. However, the amount that the Bank of Greece could provide is capped and subject to review every two weeks. And this is what happened — ELA lending has spiked: The ECB has already extended the limit it imposes on Greece's ELA twice, to €65 billion from €60 billion on February 12 and again to €68 billion on February 17. These moves have only added to speculation that deposit outflows had been increasing following the Greek elections at the end of January and the removal of the waiver. Greek finance minister Yanis Varoufakis has claimed that €700 million of deposits have returned to the country's banks following the bailout extension deal struck this week, but the damage to the sector looks far from over. With a comprehensive deal over renegotiating the terms of Greece's bailout programme still looking challenging and the government warning that it faces "difficulties in finding the money to pay its obligations to the International Monetary Fund and the European Central Bank" over the next few months depositor sentiment looks set to continue to be tested. Of course, the ECB could go a long way to alleviating these concerns by pledging to stand behind the banking system for the duration of the negotiations and re-instating the waiver on Greek collateral — something that ECB president Mario Draghi claims to be considering. However, if the outflows continue the central bank should face some tough questions over how it has used its policy discretion to lean on politicians trying to strike a complex deal. We await an update of the chart below with trepidation: Join the conversation about this story » NOW WATCH: This Video Of The Largest Breakage Of Ice From A Glacier Ever Filmed Is Absolutely Frightening
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