ATHENS-In Eu­rope's most eco­nom­i­cal­ly strick­en coun­tries, peo­ple are tak­ing their mon­ey out of banks as a way to pro­tect their sav­ings from the grow­ing fi­nan­cial storm. Peo­ple are wor­ried that their sav­ings could be de­val­ued if their coun­try stops us­ing the eu­ro, or that banks are on the verge of col­lapse and that gov­ern­ments can­not make good on de­posit in­sur­ance. So in Greece, Spain and be­yond they are with­draw­ing eu­ros by the bil­lions - be­hav­iour that is mag­ni­fy­ing their coun­tries' fi­nan­cial stress­es.

The mon­ey is be­ing hoard­ed at home or de­posit­ed in banks in more sta­ble economies. It's a steady bank "jog" at the mo­ment, not a full-bore run. But it threat­ens to un­der­mine the fi­nances of those coun­tries' al­ready-stressed lenders. And if it does turn in­to a full bank run fol­low­ing yes­ter­day's cru­cial elec­tion in Greece, it could has­ten fi­nan­cial dis­as­ter in Eu­rope and help spread tur­moil around the world.

Since the Greek debt cri­sis broke in late 2009, de­posits have fall­en by 30 per cent. Savers have slow­ly pulled some &eu­ro;72 bil­lion (US$90.24 bil­lion) from lo­cal lenders, with to­tal house­hold and cor­po­rate de­posits stand­ing at &eu­ro;165.9 bil­lion (US$207.94 bil­lion) in April, ac­cord­ing to the lat­est da­ta from the Bank of Greece.

Span­ish de­posits have fall­en about six per cent over the past year. They dipped sud­den­ly in April by about &eu­ro;3.1 bil­lion, or 1.8 per cent, to &eu­ro;1.624 tril­lion as prob­lems with the coun­try's trou­bled banks start­ed to grow to alarm­ing pro­por­tions. This is de­spite the fact that de­posits are guar­an­teed by the gov­ern­ment up to &eu­ro;100,000 across the eu­ro­zone.

Spain's fi­nan­cial tur­moil quick­ly wors­ened in late May, when Bankia, the coun­try's sec­ond-largest lender, an­nounced it need­ed cap­i­tal of &eu­ro;19 bil­lion to stay afloat. Bankia de­nied re­ports of a rush by its cus­tomers to with­draw, but the bailout scared Spaniards who as­sumed their mon­ey was safe.

Bankia client Rosa Mon­si­vais pan­icked and de­cid­ed she had to move her sav­ings from Bankia to a bank she thought would be safer. She chose a for­eign bank with Span­ish op­er­a­tions, the Dutch owned ING bank. It took longer than she thought, lead­ing to anx­ious days un­til she knew her mon­ey was in her new ac­count.

"It scared me a lit­tle. I took all my mon­ey out and put it in ING," said Mon­si­vais, a 41-year-old graph­ic artist who would not say how much mon­ey she moved. "But it took a full week to do this kind of trans­ac­tion. I was read­ing the news­pa­per each day and it wor­ried me." The mon­ey across Eu­rope is head­ed to dif­fer­ent places.

Some has sim­ply been with­drawn and spent out of ur­gent need as peo­ple lose their jobs due to re­ces­sions. Some is wind­ing up in bank ac­counts or in­vest­ed in coun­tries that are more sta­ble such as Ger­many. The rest is be­ing in­vest­ed in prop­er­ty or bonds be­ing is­sued by oth­er coun­tries that use the eu­ro.

The flight of mon­ey from oth­er coun­tries was seen as one fac­tor push­ing up cen­tral Lon­don house prices, ac­cord­ing to Knight Frank, a re­al es­tate agency deal­ing in high-end prop­er­ty. "While it looks very much that the surge in Greek buy­ers has fall­en off sharply since the be­gin­ning of the year - those who had the funds to buy have done so - we are now see­ing a no­tice­able uptick in in­ter­est from France, Italy, Spain and even Ger­man-based pur­chasers look­ing at the prime Lon­don mar­ket," the com­pa­ny said in its Prime Cen­tral Lon­don In­dex re­port.

Mean­while, some mon­ey ap­pears to be sim­ply hoard­ed at home, de­spite the risk of theft. Last month, po­lice in Athens ar­rest­ed a gang that spe­cialised in break­ing in­to base­ment stor­age spaces un­der apart­ment blocks, net­ting a rich haul in stashed cash and valu­ables.

"What the av­er­age Greek has in mind is to se­cure the eu­ros they cur­rent­ly hold," said Theodore Krin­tas, man­ag­ing di­rec­tor at At­ti­ca Wealth Man­age­ment. "That has been go­ing on for a long time, and will con­tin­ue as long as the un­cer-tain­ty in­creas­es con­cern­ing Greece's po­si­tion in the near fu­ture in the eu­ro­zone and the Eu­ro­pean Union."

Since 2010, Greece has been de­pen­dent on two bailouts to­tal­ing &eu­ro;240 bil­lion in loans to pay its bills. In re­turn, the gov­ern­ment had to promise to make deep spend­ing cuts to low­er its fis­cal deficit. That has helped put the coun­try in a deep re­ces­sion. So far it's been a trick­le rather than a flood in Greece, un­der­lin­ing its slow-mo­tion na­ture. Many have kept their de­posits be­cause they don't be­lieve Greece will leave the eu­ro.

Yes­ter­day's gen­er­al elec­tion in Greece, with pro-bailout par­ties win­ning enough seats to form a coali­tion gov­ern­ment, has eased fears about Greece's im­mi­nent ex­it from the eu­ro-zone. With most of the vote count­ed, of­fi­cial re­sults showed the pro-bailout New Democ­ra­cy win­ning 30 per cent and 130 of the 300 seats in Par­lia­ment. The rad­i­cal an­ti-bailout Syriza par­ty had 26.6 per cent and 71 seats and the pro-bailout So­cial­ist PA­SOK par­ty came in third with 12.5 per cent of the vote and 33 seats.

Wealthy Ger­mans al­so are con­cerned that in­fla­tion will surge if Eu­rope's cen­tral bank has to step in and spend huge amounts of mon­ey prop­ping up the sin­gle cur­ren­cy. So they are putting more mon­ey in­to their own coun­try's high-end re­al-es­tate in hope it will keep its val­ue.

Well-heeled Spaniards have been mov­ing mon­ey to Switzer­land and the US for months amid mount­ing wor­ries about Spain and the safe­ty of the eu­ro­zone, said Bruce Goslin, man­ag­ing di­rec­tor for Eu­rope, the Mid­dle East and Africa for K2 In­tel­li­gence con­sult­ing group.

"As we are cir­cu­lat­ing and talk­ing to peo­ple, some things are be­com­ing clear. Every­one says 'There is noth­ing go­ing on in Spain', the econ­o­my is con­tract­ing so fast we're go­ing to have to go out of Spain," said Goslin. Spain's bank­ing prob­lems come from the col­lapse of a re­al es­tate boom.

Banks that made reck­less loans are not be­ing paid back and are see­ing the val­ue of the prop­er­ties they in­vest­ed in tum­bling. This is mak­ing the coun­try's bank­ing sys­tem in­creas­ing­ly fi­nan­cial­ly in­se­cure - height­en­ing savers' fears that their mon­ey is not safe.

Fer­nan­do Enci­nar, head of re­search at re­al es­tate Web site Ide­al­ista.com, said some wealthy peo­ple who didn't have mon­ey to buy dur­ing the boom are now tak­ing ad­van­tage of prices that have fall­en 26 per cent in four years. Many Spaniards can't move mon­ey abroad be­cause times are so tough, said Vin­cent For­est at the Econ­o­mist In­tel­li­gence Unit. With un­em­ploy­ment now at near­ly 25 per cent, Spaniards with jobs and sav­ings are in­creas­ing­ly help­ing out less for­tu­nate rel­a­tives.

"Most Spaniards have huge sav­ings, but they have some­one in the fam­i­ly who needs mon­ey and isn't earn­ing any­thing," For­est said. Many Ital­ians-some of Eu­rope's most de­vot­ed savers-are al­so mov­ing mon­ey. They are wor­ried their gov­ern­ment will be the next vic­tim of the cri­sis through its heavy debt load, even though Italy's banks, gov­ern­ment fi­nances and econ­o­my are in bet­ter shape than Spain's.

Some 60,000 to 70,000 small in­vestors have bought prop­er­ty abroad, most­ly in Ger­many but al­so on the Span­ish is­lands, in the last three months, for a to­tal in­vest­ment of &eu­ro;400 mil­lion on an an­nu­al ba­sis, said Pao­lo Righi, pres­i­dent of the Ital­ian Fed­er­a­tion of Re­al Es­tate Pro­fes­sion­als.

Ruth Sti­rati, who runs a busi­ness help­ing Ital­ians buy prop­er­ty in Berlin, said she gets about ten e-mails a day ask­ing about prop­er­ties. "Over the last two or three weeks, there has been a new pan­ic," she said. "They have a thou­sand fears: That the banks won't have mon­ey, that the eu­ro will fail. It is with­out sub­stance, their doubts. But they wor­ry there will be one strong eu­ro in Ger­many, and one that is weak."

Wealthy Ger­mans aren't wor­ried about see­ing their mon­ey dis­ap­pear due to col­laps­ing banks, but they are con­cerned that their sav­ings will be eat­en away through in­fla­tion. As a re­sult, they are putting mon­ey in­to re­al es­tate-at home.

AP