Foreign companies are revisiting their plans drafted in 2011 and 2012 for reducing their activities in the Greek market or even departing altogether, with a number of Greek-owned businesses following their example.
Turnover, which had started to decline in spring, received a fatal blow with the introduction of capital controls, combined with the absence of reforms that would have assisted entrepreneurship. All this is leading many firms to revise their investment plans and strategies regarding Greece. The strong possibility of a general election in the fall constitutes another incentive for companies to leave the country.
At the same time, any merger and acquisition deals being prepared before the capital controls came into force have now been frozen and talks will not resume before the recapitalization of banks is complete or before the signing of the new bailout agreement at the earliest.
US-owned pharmaceutical and medical equipment firms are moving closer to leaving the domestic market. These are companies to which the Greek state (especially the social security funds) owes significant amounts of money, running up to many millions of euros. They started considering their departures in the spring, when the uncertainty increased, and they are now closer to a final decision.
A major multinational group active in food production with four plants in the country is examining the reduction of its presence in Greece. Its plans include the transfer of its administrative arm to another country or even the sale of an activity that has been loss-making for years. Another multinational that has been in decline for years in the food and drink domain in Greece is seeking to disengage itself from its non-alcoholic beverage activity.
More and more Greek enterprises are also contemplating heading abroad. A recent survey by Endeavor Greece showed that 23 percent of local firms have immediate plans to leave the country to enjoy greater security, stability and liquidity. Business associations are reporting that there has been an increase in calls to law firms and chambers in the last few weeks inquiring about requirements for the emigration process.
Some estimates say one in every 10 firms in northern Greece will move beyond the country’s borders in the next few months.