An exit from the euro is inefficient, undesirable and not feasible, the Federation of Hellenic Enterprises (SEV) said in a report, adding that this solution was as outrageous as a proposal circulating that someone very rich will repay the Greek debt.
“In both cases, naively some people believe that a third person will pay our debt. There is no one to take over our debt and no one will make it easier for us to live at the expense of others. Our debt must be paid in euros and if not properly repaid, the country risked to be isolated from international community, undermining all its economic and social achievements,” SEV said in its weekly bulletin on the Greek economy.
SEV described the consequences of a Grexit, noting that the country will not be able, largely, to cover its imports of goods and services (53 billion euros), while its production structure will collapse. The country’s dependence from the EU in meat and dairy products reached 100 pct, in cereals 62 pct, in livestock feed 53 pct, while 70 pct of net imports in goods are inflows to the production process, a 25 pct of our imports are re-exported and the vast majority of our trade transactions are made with the EU. SEV noted that the biggest cost for the country is that Greece will be marginalized and Greeks will become much poorer. We will not only lose the euro currency but will be forced to leave the EU as well. A Grexit and the transformation of Greek banks’ assets and liabilities to a new undervalued currency -since their debt to the European Central Bank will remain in euros- will force banks to record a negative net position, or differently, to bankrupt and be nationalized. All these will happen in an environment of hyper-inflation. In real terms, poverty will reign and misery without any improvement in wages and pensions. SEV warned that deposits in Greek banks will lose a significant part of their value.
“No political force can stand the biggest income redistribution from the poorer to the richer that a currency conversion will bring,” SEV noted.
Start-ups focusing on services sector
An increasing number of multinational enterprises with activities in Greece, and Greek brands, following an international trend, are turning their attention to small boutique companies to cover their business needs, seeking the latest technologies and know-how, but with the directness, cost and flexibility of a boutique company. This is confirmed by the success of five Greek start-up companies that managed to excel in the Greek market.
Sigmund Communications: Sigmund is a new boutique communications and public relations company, founded in March 2015, offering a wide range of communication services, such as corporate and product communication, crisis management, event and digital communication events. Sigmund offers its customers measurable results directly related with their business goals and effectively operating as in-house partner. The company’s customer portfolio includes companies such as G4S, Dior, Kraft Paints, ZARO’s bottled water, Gaia wines, etc.
NEWLAW: NEWLAW implemented the idea of creating online legal services, born in 2011 and set up in 2015. The founders of the platform exploited their experience as lawyers and their knowledge for customer needs, creating a user-friendly online environment offering legal advice.
Nestcargo: Nestcargo offers transport services to enterprises transferring goods to Greece and abroad, finding the most suitable and reliable partners. It is the first electronic cargo transport service in Greece, officially began in 2015, bringing enterprises in contact with transport and logistics companies for land, sea and air transport services.
Career in Progress: Career in Progress focuses its services to the point of professional career, from academic orientation to finding a job and consultancy services for the development of business ideas.
Greek banking system will not need fourth recapitalization, BoG says
The Greek banking system will not face the need of a fourth recapitalization, Bank of Greece vice-governor Theodoros Mitrakos said on Friday.
Addressing an event on “Surviving from NPLs and auctions”, organized by Mavrakis-Real Estate Chartered Surveyors, Mitrakos rebuffed rumors over the possibility of a new recapitalization of Greek banks, saying “the figures presented were not right as the Greek banking system has stabilized”.
The central banker underlined that the Greek banking system was robust and stable, with high capital adequacy rates, “much higher than European average rates”. The equity ratio of Greek banks was 18 pct, up from an average European ratio of 16 pct. “At the current period, Greek banks have no problem in terms of capital and stability,” he said.
Mitrakos acknowledged, however, that the banking system has serious challenges to face, such as non-performing loans, but noted that actions and timetables have been set by the Bank of Greece and commercial banks, in cooperation with the Single Supervisory Mechanism of the European Union. “The first figures from the implementation of a timetable are encouraging. A target set to reduce NPLs by 40 billion euros by 2019 I believe it is optimistic but feasible,” he said.