The countries of southeastern Europe, where Greek lenders control large parts of the banking industry, are fortifying their defenses against contagion as Greece teeters on the brink of financial collapse.
Millions of people in Bulgaria, Macedonia, Albania, Serbia and Romania have deposits in banks owned by Greek lenders, putting this corner of Europe in the frontline if the Greek crisis spreads.
Serbia and the Republic of Macedonia June 29 introduced targeted capital controls to stem outflows to Greece.
The central bank in Serbia limited the transactions of Greek bank units with their owners and increased supervision of the subsidiaries. Greek banks in Serbia have sufficient liquidity and capital reserves, which “can be used in situations where bad news can cause unnecessary negative consequences and psychological stress,” it said.
The National Bank of Macedonia ordered lenders in the former Yugoslav republic to withdraw all loans and deposits from banks based in Greece. The regulator also banned, for a maximum of six months, all of the country’s residents from investing in Greek securities.
Macedonia's central bank governor said restrictions on bank transactions with Athens had shut off any outflow of capital.
"We have not noticed today any serious withdrawal of deposits by citizens or companies," the governor, Dimitar Bogov, told a news conference.
Greek-owned banks in the region were open, paying out cash and issuing loans -- in contrast to Greece itself, where branches are shut and people can withdraw a maximum of 60 euros a day from ATMs.
In the center of Macedonia's capital, Skopje, a branch of Stopanska bank -- owned by National Bank of Greece -- was functioning normally, a teller said.
A 39-year-old customer who gave his name as Dimitar had just been in to sign a contract on a loan so he could renovate his apartment. "I don't think what's happening in Greece is coming here," he said.
In Serbia, a dealer who works for the Serbian subsidiary of a Greek bank said interbank operations with Greece had stopped because banks there were shut, but he said otherwise operations were carrying on as normal.
Still, Greek's ex-Communist neighbours were watching the drama in Athens anxiously.
Greek banks own 20 percent of the banking sector in some countries, so the exposure is real, and the region's economies have historically been fragile. It would not take a lot to push them into crisis too.
The four largest Greek lenders -- Piraeus Bank SA, Eurobank Ergasias SA, the National Bank of Greece and Alpha Bank AE -- all have units in Bulgaria, Romania and Serbia, while the latter two also operate in Macedonia.
The strong links with Greece's banks and markets have sent emerging European stocks, currencies and bonds tumbling after Greece shut its banks and imposed capital controls on June 29, raising the risk it will be forced to abandon the euro.
For most of the emerging economies, “the real risk is that the crisis in Greece triggers broader contagion to the eurozone and global financial markets,” said Neil Shearing, chief emerging-market economist at Capital Economics Ltd.
The heightened risk was reflected on debt and currency markets. The Hungarian and Russian currencies lost as much as 1.5 percent, leading declines in emerging markets. Stock markets in the region also generally declined amid a worldwide stock rout.