Greek importers forced to pay for economic fears

Greek importers and exporters are under an informal state of boycott in terms of their business dealings with partners abroad, as their customers and suppliers are increasingly demanding advanced payments, slashing the number of days they are prepared to extend credit and rejecting notes of guarantee from Greek banks....
This informal embargo became even more acute over the 10-day period of political uncertainty at the start of November, with many foreign companies refusing even to take phone calls from their Greek partners, according to Vassilis Korkidis, president of the National Confederation of Greek Commerce (ESEE). Market representatives stress that political and economic stability is key to restoring liquidity, as well as ensuring the smooth supply of the market and the continued production activity of businesses that are beginning to run out of primary materials.

Many also believe that Greek exports will also feel the pressure of insecurity as they have already seen a small drop in orders from abroad. "A few days ago I needed to import parts for a ship from Korea," said a shipbuilding supplier who declined to be named. "I had enjoyed an excellent relationship with the company for years. I gave them a letter of guarantee for the merchandise from a Greek bank, but they refused it.

They wanted a guarantee from the shipping company that owns the ship because they knew it, as the ship had been dry-docked in Korea, but also because they will now only trust shipping companies." Another businessman had a similar experience a few days ago when trying to import cables from a firm in Finland with whom his company had been collaborating with for over 30 years, and having always been good on its payments during that time. This time though, the Finnish company asked its Greek partner to offer guarantees for at least half of the merchandise.

"Foreign companies will accept letters of guarantee from Greek banks only for small amounts, 50,000 euros at tops. I recently had a contract for merchandise worth 350,000 euros and, of course, I had to turn to a foreign bank," said Ioannis Papageorgakis, head of the Association of Commercial Agents and Brokers.

If foreign companies accept any letter of guarantee it's good news, according to Papageorgakis, who added that most suppliers demand a down payment, sometimes even for the entire order, while in the past they would have extended credit for six months up to a year. Exporters are facing even more problems. Many are affected by changes in the way they do business with their primary material suppliers, who will no longer offer discounts, even if the order is paid in full, and, foreign firms now demand guarantees of completion from their Greek suppliers.

This troubled relationship was outlined recently in a study conducted by Palmos Analysis for the Thessaloniki Chamber of Commerce and Industry, which found that 48 per cent of Greek exporters have noticed a marked change in the way they do business with their foreign customers.