Greek trade hampered by current financial situation

The strenuous situation in Greece at the moment, marked by the temporary closure of all banks ahead of the referendum to be held on Sunday 5 July, has entailed difficulties for the country’s importers, many of whom are being forced to pay with cash. According to Evangelos Nenopoulos, of Fructa Union, this means “we cannot import many things; all companies in Greece have some stocks, but if the banks remain closed we may face a big problem.”

Mr Nenopoulos, in any case, assures that there should be sufficient stocks to last for at least two to three weeks, “and with the summer here we’ll have a lot of domestic produce. Imports are not big in this period, but problems may arise afterwards,” and even now, “some are already afraid to sell to Greek companies, as they are worried about their money.” When it comes to exports, he explains that “firms with company accounts in other countries within the European Union will be alright, but those with only Greek accounts will likely have problems to pay.”

Even if they arrive, “at destination they would have to find return cargo, and that’s where they’d hit a dead end, because it is assumed that importing companies will be able to transfer money to place orders, and that’s not possible right now. Also there isn't much that you can pay for with only 60 Euro from an ATM.”

He says that, presumably, all of this will be resolved after the referendum, but at this moment it is just speculation. “Personally, I cannot see a good ending to this ugly situation. So far, we haven’t seen any dramatic effects or commercial consequences from these political games, and if Greece ends up collapsing, it will only be beneficial for consumers of Greek produce, because local costs will plunge and we’ll become –theoretically at least - a very competitive and cheap sourcing country to the detriment of local income. Let’s not forget that to export our produce we need return cargoes for our trucks and that has already stopped!.”

She confirms that Greek companies are no longer willing to receive transfers from other countries. “We, at Zeus, are asking them not to send us money, since there’s capital control, so we cannot get the money from the bank. We hope that the pause won’t last longer than one week. It has also been said there won’t be tight capital control for healthy businesses, although they will have to deal with more bureaucracy.”

Christina also has doubts on whether Greece would have a chance to be more competitive if it went back to the drachma. “With the Euro we pay an interest rate of 7%, but with the drachma it would likely go up to something like 35%, so how will we compete with Italy or New Zealand? That’s the question, from my personal view.”