Imposed just yesterday, capital controls are already making widespread negative impact on the Greek market. The effects are being felt by locally based energy-sector companies, big and small, all trapped amid the overall uncertainty and prospect of a possible Greek default and exit from the eurozone.
Both local and multinational enterprises operating here have presently frozen all activity. Investment plans, orders, and all types of transactions, including tax obligations and payments to suppliers and staff, have stopped. It is all swiftly developing into a major shock for the market.
Although enterprises are making an effort to remain composed, the underlying panic cannot be hidden. Both local firms and multinational subsidiaries are preparing to activate emergency plans.
Trading ties between local and foreign companies have been devastated as a result of the sharp increase of distrust from abroad. Any exisiting favorable credit terms offered are vanishing. Officials at locally based companies of all sizes are already reporting that foreign suppliers are demanding full advance payments for all orders before providing products and services. Under the current stifling conditions brought about by capital controls, this is simply impossible.
Responding to the alarming and intensifying negative market developments, entrepreneurial representative groups – SEV (industrialists), ESEE (merchants), SETE (hoteliers), and GSEBEE (small and medium-sized businesses) – joined forces yesterday to seek an emergency meeting with Prime Minister Alexis Tsipras. A meeting was initially scheduled for today but later postponed as a result of the Prime Minister’s overloaded schedule of other urgent matters.
It has already become perfectly clear that companies without funds abroad will encounter serious operational problems in Greece amid the current conditions. Enterprises that have transferred their headquarters and funds abroad, as well as multinationals supporting local subsidiaries, will be favorably positioned.