Greeks brace themselves for forced retreat from the euro

Bankers say up to €800 million (£650m) has been withdrawn each day this week and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumours that a radical leftist leader may win the election.

The last published polls showed the conservative New Democracy party, which backs the €130bn bailout that is keeping Greece afloat, running neck and neck with the Syriza party, led by Alexis Tsipras, which wants to ditch the rescue deal.

In Greece, publishing such polls so close to the election is banned, however party officials have been leaking their own “secret polls”, often carrying contradictory results.

On Tuesday, one rumour doing the rounds was that Syriza was leading by a wide margin.

“This is nonsense,” one Greek pollster said yesterday on condition of anonymity. “Our polls show the picture has not changed much since the last polls were published. Parties may be leaking these numbers on purpose to boost their standing.”

The pollster said there was some consolidation, with voters turning to New Democracy and Syriza from smaller parties but the pool of undecided voters remained unusually large so close to the election and the result was impossible to predict.

Both parties say they want Greece to remain in the single currency but Syriza has pledged to scrap the bailout agreement signed in March which has imposed some of the toughest austerity measures seen in Europe in decades.

The European Union and International Monetary Fund have warned that Greece, which has only enough cash to last for a few weeks, must stick to the conditions of the bailout deal or risk seeing funds cut off.

New Democracy has been telling voters they must choose between the euro or the drachma, while Syriza promises to end the austerity measures imposed by Greece’s international lenders, such as wage and pension cuts, that have driven many Greeks into abject poverty.

New Democracy leader Antonis Samaras said yesterday that Greece must form a government after this weekend’s vote.

He insisted yesterday that his party would do “everything for there to be a government.”

The only conditions, he said, “is that we stay in the euro – we’re not playing with Europe.” His second condition was to amend the bailout deal so new jobs could be created.

He insisted pulling out of the bailout plan “would be a recipe for catastrophe. It’s an exit from the euro. We can’t accept it under any circumstances”.

Fears that Greece will collapse financially and leave the euro have slowly drained Greek banks over the past two years. Central bank figures show deposits shrank by about 17 per cent, or €35.4bn in 2011 and stood €165.9bn at the end of April.

Bankers said the pace was picking up ahead of the vote, with combined daily deposit outflows from the major banks at €500-€800m, and €10-€30m at smaller banks.

“This includes cash withdrawals, wire transfers and investments into money market funds, German Bunds, US Treasuries and EIB bonds,” said one banker.

Retailers said consumers were stocking up on tinned food while almost all other goods were seeing sales collapse. Greece is in its fifth year of recession.