Companies take measures to limit impact of possible capital controls
Company heads from various Greek industrial sectors tell Kathimerini that they have learned a lot from Cyprus and taken all the necessary measures to ensure their capital is not trapped, even in the chance of capital controls being imposed. They explain the moves they have made to safeguard their companies.
These are businesses that are mostly export-orientated and have survived the six-year recession (2008-13), maintaining high cash reserves and keeping their operating and net profits in the green. They have taken four key measures.
First, they started transferring cash abroad last September, a trend which peaked in early 2015. They also opened accounts at foreign banks to make payments to suppliers for raw materials.
The second measure, which has been ongoing throughout the negotiations between Athens and its creditors, has been weekly transfers (usually midweek) of revenues from Greece to a foreign country. And just before pay day, they boost their bank accounts from abroad by no more than the precise sum of their employees’ monthly salaries.
Accelerating payments to their suppliers in Greece was their third move, aimed at releasing cash from the companies’ coffers and thereby avoiding the negative consequences of any nasty developments such as the imposition of capital controls. The fourth measure has been to bring forward the renewal of contracts with foreign clients, which may expire in the third or fourth quarter of the year. This is because international rivals have been trying to take advantage of the political and economic situation in Greece, encouraging major multinational groups to break their contracts with Greek enterprises, which are based on a great deal of effort and years of reliable cooperation from the Greek side.
Furthermore, many companies have removed from their client lists any companies or individuals who have proved inconsistent with payments in the past. Repayment periods have also been shortened considerably: For instance, tobacco products have a payment deadline after 20 days, in construction materials it is up to 70 days and in retail commerce between 60 and 80 days.
