The euro has come under pressure on the foreign exchanges after leading Greek politicians warned the country would be unable to make its next debt repayment to the International Monetary Fund (IMF) on 5 June without a rapid deal with its creditors.

At the start of a crucial two-week period for Greece, the credit rating agency Moody’s said there was a high and increasing risk that the crisis stricken country would have to impose capital controls to stem capital flight from its banks.

The first hints of measures to prevent bank runs came as Reuters reported that the Syriza-led coalition in Athens was considering imposing a transaction tax on bank customers.

With the European central bank discussing whether to expand emergency lending to Greece, the single currency lost fresh ground against the US dollar – extending this week’s fall to 3%.

Investors are becoming alarmed at the prospect – fuelled by signs of a split in Syriza’s ranks – of Greece running out of money, defaulting on its debts and leaving the single currency.

Nikos Filis, the parliamentary speaker, said the IMF would not get the €305m (£218m) due in two weeks unless creditors unlocked some bailout funds.



Stressing that the government would prioritise wages and salaries over repayments to Greece’s creditors, Filis said: “Now is the moment that negotiations are coming to a head. Now is the moment of truth, on 5 June.

“If there is no deal by then that will address the current funding problem, they won’t get any money.”

Filis’s comments were echoed by Thanassis Petrakos, Syriza’s parliamentary spokesman, who said the country would not suffer if it reneged on its debts.

The comments reflect a feeling among some coalition members that an exit from the euro and a return to the drachma would be preferable to a continuation of the austerity programme, which has seen the Greek economy shrink by 25% in five years.

Moody’s expressed concern about the state of Greece’s banking system and said the banks would need help from the ECB for some time even if a deal is struck in the next fortnight. Noting that the outlook was negative following an outflow of €30bn since last December, Moody’s said: “These pressures are unlikely to ease over the next 12-18 months and there is a high likelihood of an imposition of capital controls and a deposit freeze.

“In our view, the banks are likely to remain highly dependent on central bank funding, as ongoing uncertainty regarding Greece’s support programme continues to compromise depositors’ confidence.”

