Nearly a quarter of Greek firms seek to move abroad: Survey

Nearly a quarter of Greek firms seek to move abroad: Survey
Updated 20 July 2015

Nearly a quarter of Greek firms seek to move abroad: Survey

Nearly a quarter of Greek firms seek to move abroad: Survey

ATHENS: Capital controls imposed by the Greek government are taking a heavy toll on the country’s businesses, a survey showed, with nearly a quarter saying they are seeking to move their headquarters abroad.
Endeavour Greece, a non-profit group that supports entrepreneurs, found that 58 percent of the 300 companies it surveyed between July 13 and July 17 reported a “significant impact on their operations caused by the limitations imposed to cross-border transactions.”
“Many of these companies cannot import raw material or have access to foreign services and infrastructure,” the group said in a statement, adding that 23 percent “plan to transfer their headquarters abroad for security, cash flow and stability reasons.”
More than two thirds of the companies — 69 percent — reported a “significant drop in turnover,” with 11 percent forced to decrease or suspend production due to shortages of raw materials.
Greece imposed a raft of capital controls on July 29, closing the banks and restricting cash withdrawals in a bid to prevent a disastrous bank run from draining money out of the financial system.
Banks reopened on Monday and restrictions on cash withdrawals have been partially relaxed, though the capital controls remain in place.
Endeavour Greece reported that businesses were facing “significant impediments” due to the continuing ATM limits, but on “a smaller scale.”
Nearly half of the companies — 45 percent — said they had been forced to postpone payments to suppliers.
The International Monetary Fund said Greece was no longer in default on its loans after remitting about two billion euros ($2.2 billion) to make up for missed debt payments.
“I can confirm that Greece today repaid the totality of its arrears to the IMF.... Greece is therefore no longer in arrears to the IMF,” said spokesman Gerry Rice in a statement in Washington.
Greece’s ongoing IMF support program was frozen on June 30 when the country, in the middle of tense negotiations with European Union creditors on more funding, failed to make a key payment on outstanding loans from the Fund.
It missed a second payment on July 13 as the negotiations for bridge funding ahead of a huge third bailout program for the cash-short nation were being finalized.
The repayments were finally made possible by a short-term loan of 7.16 billion euros granted by the European Union on Friday.
The government also needs to make a 4.2 billion euro payment to the European Central Bank.
Rice said that now that Athens is no longer arrears, the IMF “stands ready to continue assisting Greece in its efforts to return to financial stability and growth.”
New austerity taxes demanded by Greece’s European creditors are now in force, making most everyday items more expensive — from coffee to taxis.
The hefty sales tax rise on many basic goods from 13 percent to 23 percent formed part of a package of confidence-building measures the Greek government had to introduce for negotiations on a third bailout to begin.
For an economy reeling from weeks of uncertainty and capital controls, the higher taxes are expected to accentuate the recession.
Dimitris Chronis, who has been running a small kebab shop in central Athens for 20 years, says the new taxes could push his business over the edge especially when combined with higher business taxes and meat prices.