One in four Greek companies (23%) is planning to move abroad in order to reduce the negative effects of the introduced capital controls and to avoid similar or more severe consequences in the future. This is one of the main conclusions from the survey conducted by the agency Endeavor Greece among 300 selected companies in various sectors in the period 13-17 July 2015.
13% of companies indicate that they have already moved abroad. The sample may seem small but, as reported by the Greek daily Kathimerini, it is indicative of the concern prevailing in business circles and continues the information that appeared over the weekend, namely that 60,000 companies had applied to move to Bulgaria because of capital controls and the inability of the government to solve their problems.
The uncertainty in the Greek market is proved by the fact that 54% of companies are of the opinion that cuts in bank deposits are in store, 22% of them believing that they will amount to over 25%. At the same time, 73% of companies are convinced that capital controls will be in force for a period of over 4 months and 44% that they will continue longer than 10 months.
The restrictions on international payments have affected the functioning of 58% of companies, since many of them are unable to import raw materials or to use services or infrastructure abroad. 36% indicate that their functions have been affected to a lesser degree and only 6% have continued to operate smoothly.
The imposition of capital controls has also created problems for companies, though to a lesser degree. 69% report a significant drop in sales and 18% indicate that their turnover has fallen by over 50%. 27% of companies report no change in sales and 4% have even increased them. The majority of them are groceries and e-commerce companies.
The consequences of capital controls have led to a domino effect in the market since, in an attempt to deal with the lack of liquidity, company owners have taken measures such as delaying payments to suppliers (45%), payments of wages, but at a lower rate (3%), cutting indirect costs of marketing campaigns (28%), cutting wages and reducing and even discontinuing production activities (11%). One in ten companies has resorted to staff cuts.
On the other hand, the fear of deposit haircuts and return to the drachma has driven many companies to take the opposite actions. For example, 40% of them have paid all their obligations to suppliers and 46% have paid employees’ salaries in advance.
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