Arab Today, arab today greeks suffer under cash crunch
Last Updated : GMT 18:35:19
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From retail to culture

Greeks suffer under cash crunch

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Arab Today, arab today Greeks suffer under cash crunch

People wait to withdraw cash
Athens - Arab Today

With three of his transport company's trucks immobilised in Germany, unable to pay for fuel and tolls, Yannis Fourtoulakis warns that Greece's capital controls are wreaking deep damage to his beleaguered country's economy.

"If the situation is not resolved soon there will be problems, mainly with food," predicted the 38-year-old boss of an Athens-based transport company that imports chemicals from Germany for Greece's refinery industry.

"Petrol stations have stopped supplying on credit as they are also forced by refineries to pay cash for their fuel," explained the transporter.

"It's a chain, from the petrol stations the problem is passed on to transporters and to producers."

His experience contradicts soothing words from the radical left government of Prime Minister Alexis Tsipras, which insists that there is enough fuel on the market to keep the economy going.

"(We) assure Greek citizens and visitors that there are sufficient... quantities on the market and that prices are steady," the economy ministry said Wednesday.

- Situation 'will get worse' -

The disconnect between the state reassurances and the tough reality on the street threatens to widen as the effects grow of Greece's capital controls, which were imposed in the lead-up to its snap referendum last weekend.

"With the banks closed, the situation will get worse and worse in a few days as the problems are going to be accumulating," says Nikos Vettas, director of the analysis firm Foundation for Economic and Industrial Research.

"Already we have some problems with importing and exporting businesses. So the sooner the banks open so that trade can be facilitated, the better it will be," he said.

One prominent sector already hit is print media, with many of Greece's daily newspapers visibly slimmer this month.

"We've had to reduce the number of pages to save on paper," says Athinagoras Mykoniatis, director of Patris, one of the oldest newspapers on the island of Crete, which is now half its usual 64-page size.

In successive statements, the government admitted to "difficulties" in obtaining printing paper that could lead to some local newspapers temporarily shutting down, then insisted that announcement "was not meant to infer that there will be a paper shortage".

- Online squeeze -

Even online, Greeks cannot escape the squeeze. Global money broker PayPal has blocked outgoing transactions.

"Due to the recent decisions of the Greek authorities on capital controls, funding of PayPal wallet from Greek bank accounts, as well as cross-border transactions funded by any cards or bank accounts are currently not available," PayPal said in a statement.

"Payment attempts may also be declined by the card issuer or banking institution," it added.

For Greeks who supplement their income with online sales, the news was a blow.

"Around 40 percent of my income is from online sales, and right now I don't know what to do. I haven't put up anything for sale because I'm afraid the payment will be blocked by Paypal," says 39-year-old Filippos Englezakis, who trades in collectible items.

Kostas Patinaris, a 45-year-old who runs an online clothes selling business, faces a similar predicament.

"Before the capital controls were imposed I had 30-35 orders per day. Now I have none... I've had to send my staff on forced vacation," he says.

- Tourism impact -

Because the banking restrictions do not apply to foreign cardholders, tourists have been partly shielded from the market disruptions.

Greece has thus avoided a mass exodus in the middle of its high tourist season, although last-minute reservations have fallen by 30 percent, according to Alexander Lamnidis, head of Greece's Tourism Confederation.

He said that on some of Greece's famed islands, ATMs were running dry, and hotels were encountering difficulties in being resupplied with meat.

Visitors wishing to sample the country's vibrant culture scene are also likely to be out of luck as dozens of festival performances have been cancelled.

Even museums were feeling the pinch, with exhibitions scheduled for later in the year under threat.

"Institutions planning autumn exhibits may have to cancel," says a senior official at one of Greece's main museums.

He adds that "things will get difficult" if the country is actually forced to change currency by an exit from the euro.

"The contracts are in euro. It will not be easy to find exhibits on loan, and there are also insurance and transport costs to consider," he told AFP on condition of anonymity.

But, he stresses, "we should not succumb to pessimism. I believe they (the eurozone creditors) will not let Greece sink."
Source: AFP

 

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