ECONOMY

Closure of country’s banks leads commerce to grind to a halt

The bank shutdown and the imposition of capital controls have led to a halt in trade across the country. With the exception of food stores and gas stations, which saw another day of increased activity on Monday, the rest of the market has practically ground to a halt, which will no doubt impact on the sustainability of enterprises and jobs.

Professionals from the sectors of commerce and industry warn that if banks remain shut for over 10 days, stocks of imported finished goods and raw materials will run out, which will lead to problems in production and the first serious shortages.

Market experts say that it is mainly prepaid orders that are being delivered, given that international suppliers have insisted on full payment in advance for deliveries to Greece since the end of 2014.

On Monday the British Treasury issued guidelines to UK enterprises trading with entities in Greece. It recommends that British firms first check as to whether their clients can pay them and then renegotiate their contracts, or, if necessary, resort to arbitration or justice. The British Treasury also encourages companies planning to do business in Greece to consult their trade association first or seek advice from lawyers or economists.

“There are factories which have had the same suppliers for 30-40 years and operated on credit. Recently they were also asked for full payment in advance. Now even that cannot happen,” Ioannis Papageorgakis, the president of the Athens Association of Commercial Agents & Brokers (SEADA), told Kathimerini.

He added that the problems expected in exports concern transport costs and the fact that exports to some third countries, such as Russia, require the transporter to bring part of the payment in cash.

A number of industries are also about to revise their credit policy toward supermarkets. “Our main concern is to keep supplying the market, as we do not want any shortages that would harm the reputation of the company. Our agreements with retailers could change soon, depending on developments, because although we are a healthy group and we want to reduce our exposure to credit risk,” a senior officer at a major multinational group in the food and hygiene sectors told Kathimerini.