ECONOMY

Foreign firms leaving domestic market in numbers

Since the start of the Greek financial crisis, a number of foreign companies in commerce, insurance, pharmaceuticals and other industries have opted to pull out of the country overs fear that the problems they have been facing will grow in the coming months.

Indeed, meager consumer expenditure, austerity measures that are making incomes shrink ever further, almost nonexistent efforts to combat bureaucracy and create a business-friendly tax environment, and the unpaid debts of the state to local and foreign companies, have created a hostile environment that is giving little reason for foreign firms to stay in Greece.

Under these circumstances it comes as no surprise that a high number of foreign firms have departed from the Greek market, among which are some particularly notable examples.

The recent suspension of business in Greece of French credit insurance company Coface, a subsidiary of Natixis investment bank, for example, has had a profound impact on retail commerce.

Coface?s announcement in June that it would stop signing new insurance contracts for exports to Greece was a result of the company finding it increasingly difficult to collect payment from Greek importers.

Its decision has meant that the local wholesale market of electrical and electronic appliances and retail commerce in general are left without the safety cushion that specialized insurance companies offered them since 2000 and mainly since 2004.

In the same period, Euler Hermes — a Credit Agricole subsidiary that is the biggest commerce insurance company in the world — announced that it would stop coverage for merchandise imported to Greece over fears that the country could exit the eurozone.

Saturn is the latest foreign player to have departed from the domestic market of electrical and electronic appliances. Coming before it were ElectroWorld and Fnac, the latter being the French company that is Europe?s biggest chain of department stores with technological and cultural merchandise.

A few days ago another foreign company, Univel, decided to leave Greece, saying that it has decided to transfer its production line to Romania instead. Univel produced electronic security systems and high-technology products in Greece.

A number of foreign pharmaceutical companies active in Greece have also been examining the cost of proceeding to layoffs and severance packages as part of plans to close down their branches in this country.

Other drug companies have limited their commercial activity and are just trying to sell their stock off: Bristol Myers Squibb, for example, recently dismissed 55 employees — mostly sales representatives — as a result of the failure of the state to produce a new list of drug prices in the past few years, meaning that the company was reluctant to introduce new products to the market.

Germany?s Biotest, meanwhile, recently announced the closure of its subsidiary in Greece and said that it will not longer be exporting to this country because of the amount of unpaid bills that have amassed.