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| Greek firms fear slow death as bank freeze cuts off imports | Greek firms fear slow death as bank freeze cuts off imports |
| (about 1 hour later) | |
| The picturesque region of vineyards beyond Thessaloniki is famous for its wines and spirits that are in high demand across the world, regardless of Greece’s economic crisis. “But in order to sell wine abroad, we need bottles to put the wine in,” sighs a despairing Emmanuil Vlachogiannis, vice president of Thessaloniki’s chamber of commerce. | |
| “We don’t make bottles in Greece, we import them. But with capital controls and a freeze on the banking system, imports are practically nonexistent, so the bottles aren’t coming in. No one can export wine without bottles. We’re experiencing a devastation of the economy. For one week nothing has moved, there are no transactions.” | |
| Greek banks have been closed for more than a week and Greek customers’ money has essentially been frozen to prevent the collapse of the banking system. It is one of the most dramatic and far-reaching twists in five years of the country’s debt crisis. | |
| The bank paralysis, which is expected to last at least until the end of this week – capital controls are likely to drag on far longer – means that as well as a €60 (£43) limit on cash-machine withdrawals there is also a lockdown on payments from any Greek bank account to accounts abroad. | |
| In an economy that produces very little itself and instead relies on importing products ranging from pharmaceuticals, paper and plastics to beef, milk and animal feed, this has led to a meltdown in the motor of Greek economic life. | |
| Greek consumers are no longer able to make simple online transactions involving companies based abroad, such as buying low-cost air tickets (the Irish company Ryanair has taken the unusual step of allowing cash payments for tickets at Greek airports), paying for apps for their iPhone or renewing international subscriptions. | Greek consumers are no longer able to make simple online transactions involving companies based abroad, such as buying low-cost air tickets (the Irish company Ryanair has taken the unusual step of allowing cash payments for tickets at Greek airports), paying for apps for their iPhone or renewing international subscriptions. |
| And as Greeks have stopped buying all but the essentials of food and fuel, many businesses, particularly retail, have been at a virtual standstill for eight days. Some of the worst hit are small- and medium-sized businesses. | And as Greeks have stopped buying all but the essentials of food and fuel, many businesses, particularly retail, have been at a virtual standstill for eight days. Some of the worst hit are small- and medium-sized businesses. |
| “This is not just about the old lady who can’t get more than €60 out of her account, it’s the destruction of all the major infrastructure of this country, or whatever’s left of it,” said Yannis Dilidimos, who runs a firm that makes toilet paper, kitchen roll, napkins and other household products. | “This is not just about the old lady who can’t get more than €60 out of her account, it’s the destruction of all the major infrastructure of this country, or whatever’s left of it,” said Yannis Dilidimos, who runs a firm that makes toilet paper, kitchen roll, napkins and other household products. |
| Like many companies, his depends on importing raw materials from abroad. Until now, Dilidimos had weathered the crisis – after all, toilet paper is a necessity product, and Greece consumes 120,000 tons of tissue products a year. But his stocks are running short. “We have enough for three weeks. After that we’ll run out of raw material and we can’t bring in anything new from abroad because we can’t pay foreign suppliers. | Like many companies, his depends on importing raw materials from abroad. Until now, Dilidimos had weathered the crisis – after all, toilet paper is a necessity product, and Greece consumes 120,000 tons of tissue products a year. But his stocks are running short. “We have enough for three weeks. After that we’ll run out of raw material and we can’t bring in anything new from abroad because we can’t pay foreign suppliers. |
| “That’s the slow death that everyone is talking about. We’d be running a significant risk of going out of business: if the factory closes because we have no raw materials, losses would accumulate, lines would be closed, the next step would be laying off workers and declaring bankruptcy.” | “That’s the slow death that everyone is talking about. We’d be running a significant risk of going out of business: if the factory closes because we have no raw materials, losses would accumulate, lines would be closed, the next step would be laying off workers and declaring bankruptcy.” |
| News publishers are struggling to get their hands on paper. “At least one of the two major daily papers in northern Greece is currently using paper that they had previously stockpiled for different reasons, including for special editions,” said Iannis Kotsifos, of the Thessaloniki-based Journalists Union of Macedonian and Thracian Daily Press. “It’s not the usual paper they would be using for daily editions.” | News publishers are struggling to get their hands on paper. “At least one of the two major daily papers in northern Greece is currently using paper that they had previously stockpiled for different reasons, including for special editions,” said Iannis Kotsifos, of the Thessaloniki-based Journalists Union of Macedonian and Thracian Daily Press. “It’s not the usual paper they would be using for daily editions.” |
| Nikolaos Mitsangas, who runs a Thessaloniki company producing animal feed and supplements for cattle, sheep and goats all over Greece, said he could not import vegetable products and grains and was relying on depleting stock. He said there could be a knock-on effect on farmers. “If this continues for a lot longer, it might come to the point where we have to stop operating.” | Nikolaos Mitsangas, who runs a Thessaloniki company producing animal feed and supplements for cattle, sheep and goats all over Greece, said he could not import vegetable products and grains and was relying on depleting stock. He said there could be a knock-on effect on farmers. “If this continues for a lot longer, it might come to the point where we have to stop operating.” |
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| A special committee has been set up to deal with requests for emergency payments and to address the problem of falling pharmaceutical stocks, which was a problem in Greece long before the capital controls. But many business leaders fear the committee will be slow to act and could even be “an open window for corruption”, in the words of one. | A special committee has been set up to deal with requests for emergency payments and to address the problem of falling pharmaceutical stocks, which was a problem in Greece long before the capital controls. But many business leaders fear the committee will be slow to act and could even be “an open window for corruption”, in the words of one. |
| Tourists are still flocking to Greece, and the services provided for them haven’t changed – foreign visitors are exempt from the cashpoint limits. But Yannis Kokkinos, who runs a Thessaloniki-based swimming pool construction firm, said: “We’re unable to provide the most simple service to our clients — they might need a small part for a filter or a pump that costs €30 or €40 for us to bring in from Spain, England or Turkey. But we can’t make a foreign transaction. | Tourists are still flocking to Greece, and the services provided for them haven’t changed – foreign visitors are exempt from the cashpoint limits. But Yannis Kokkinos, who runs a Thessaloniki-based swimming pool construction firm, said: “We’re unable to provide the most simple service to our clients — they might need a small part for a filter or a pump that costs €30 or €40 for us to bring in from Spain, England or Turkey. But we can’t make a foreign transaction. |
| “We’re in the high tourist season now, if a hotel pool is out of order for even one day, that can have a huge impact. We’re reduced to saying to suppliers: ‘Please help us, please give us credit.’ But that’s not a professional way to do business, it’s not an image anyone likes to project.” | “We’re in the high tourist season now, if a hotel pool is out of order for even one day, that can have a huge impact. We’re reduced to saying to suppliers: ‘Please help us, please give us credit.’ But that’s not a professional way to do business, it’s not an image anyone likes to project.” |
| Alexander, who sold his house to set up a small tea room in Thessaloniki two years ago, said it had done well initially. He shrugged. “Trade in the past week? It has been zero.” | Alexander, who sold his house to set up a small tea room in Thessaloniki two years ago, said it had done well initially. He shrugged. “Trade in the past week? It has been zero.” |