"Tragic" Cyprus Contagion To Cripple 1600 Greek Businesses
The head of Greece's National Confederation of Greek Commerce has slammed the Troika and the European leaders for their treatment of Cyprus as the first wave of contagion begins. "The tragic situation.. will have immediate effects on the Greek market," he noted as at least 1600 Greek businesses will suffer from the Cyprus deal - with the haircuts and capital controls expected to dramatically impact the EUR1bn of Greek exports to Cyprus. The so-called "German Plan" will "cripple" Cyprus, he added, and "sentences" Cyprus to a long period of recession and debt.
At least 1,600 Greek businesses - from shipping, retail to tourism - will suffer from the Cyprus bailout deal announced on Sunday after a showdown between Brussels and Nicosia, according to Vasilis Korkidis, head of the National Confederation of Greek Commerce (ESEE).
“The tragic situation in Cyprus will certainly have immediate effects on the Greek market, since a large part of the domestic businesses maintain close ties with Cypriot companies,” Korkidis said in a statement on Tuesday. He was particularly critical of the capital controls and the impending haircut on large deposits (over 100,000 euros) expected to be more than 40%.
Greece's exports to Cyprus exceed 1bn euros annually and the country is Cyprus’ biggest trade partner, followed by the United Kingdom and Germany.
According to Korkidis, the Eurogroup’s Cyprus deal establishes new, severely punitive rules for countries needing emergency aid in the future.
He also slammed the Eurogroup deal (which he called the "German plan" to stress the key role played by German Chancellor Angela Merkel in the negotiations) for “crippling” Cyprus. He said the deal is “tragic” because it “sentences” Cyprus - the country’s markets and economy - to a long period of recession and debt.