This page has been archived and commenting is disabled.
Greek Economy In "Doomsday" Tailspin: 59 Businesses, 613 Jobs Lost Each Day, Suppliers Demand Cash Up Front
While the Greek government has wasted the past 4 months experiment with game (and hope) theory-based negotiations with the Troika, debating what reforms it should implement, what the budget surplus should be, and how much of a pension and wage haircut the local workforce should undergo just to keep the trickle of European money flowing and "allow" the IMF to repay Greek IMF obligations and the ESM to repay the ECB, the Greek economy has slammed into a brick wall because according to Greece's retailers association, about 59 businesses close down and some 613 jobs are being lost each day.
Unfortunately, that number does not give justice to the total economic collapse that has happened in Greece over the past 5 years, just so the myth of the doomed "common currency" could be maintained one day at a time.
It is not just the country's domestic businesses that are shuttering down at a dramatic pace: even projects once funded by the European Union, such as motorway construction and which served as a source of jobs for many local contractors, have been mothballed.
When construction of four 6.5 billion euro toll roads across Greece resumed last year, Greek and foreign businesses rejoiced. The motorways, largely funded by the European Union and built by companies including Germany's Hochtief, France's Vinci and Greek firms Ellaktor and GEK Terna, had been halted in 2010. Last year, work resumed after the Greek government paid part of a fine to contractors for the four-year delay.
Now, work has slowed once more. With aid from its bailout programme frozen, the government has used its last cash to pay public sector wages and pensions, and service debt. That has left it without 230 million euros it needs to contribute its part of the financing for the road.
The hole has put the entire project at risk again, one of many business ventures suffering amid the uncertainty of four months of negotiations between Athens and its international creditors.
"As a country, we need to move as quickly as possible to strike a deal that will resolve issues being faced by big and small (infrastructure) projects," says George Sirianos, head of the association for big Greek construction firms.
Reuters tells the story of Paul Arnaoutis, whose firm sells imported medical supplies to Greek hospitals, has been waiting four months to be paid 1.3 million euros the state owes, nearly as much as his company's entire 2014 sales of 1.7 million.
The Greek insolvency, which had been masked with European liquidity, is finally being appreciated by the vendor chain, and as a result, Arnaoutis' Chinese suppliers are now demanding cash up front because of the risk of doing business with Greece. Previously they gave 30-60 day receivable terms. "He fears a doomsday scenario in which the government quits the euro and pays its bills with IOUs, which foreign suppliers will not accept."
"If there is no deal and the government decided to take Greece out of the euro, all Greek importers would be ruined."
Meanwhile, his company is expected to pay tax on 335,000 euros in reported profit from last year, even though it still hasn't received most of the money for the sales: "The profit is virtual".
Ironically, in the US the bulk of non-GAAP profit is also "virtual", however for the time being the generosity of capital markets allows money-losing US companies (if only on a GAAP basis) to fund themselves entirely courtesy of gullible investors who hope that any minute now, the cash flows will rain.
Unfortunately for Greece, it is now too late:
[E]ven if a deal is clinched and Greece survives as a euro zone member, many companies are so battered by the cancellation of contracts, delays in state payments and the steady outflow of bank deposits that they will struggle to make up for losses.
According to Greece's retailers association, about 59 businesses close down and some 613 jobs are being lost each day.
It says about 95 percent of businesses' applications for loans are being rejected by commercial banks. Many small and medium-sized firms have stopped even asking banks for credit.
All of this excludes an even more troubling development in the local banking system which, too, is on the verge of total collapse: as reported last Friday "Bank Run Surges "Massively" As Depositors Yank €700 Million Today Alone."
And with people's confidence in the banking system, the bedrock of every modern society, shaken, everything else follows:
Gaia Wines, which produces 350,000 bottles of wine a year and exports 65 percent to the United States, Britain and 22 other countries, was to begin selling in New Zealand in April, but the first client there cancelled its 4,000 euro order.
"Our wines are of good quality. But people get scared because of the turmoil. This is reasonable," says co-owner Leon Karatsalos.
The company has been waiting nearly a year for the government to respond to a request for access 150,000 euros in EU funds to renew equipment at one of its plants. The response was supposed to come by January but never came, says Karatsalos.
Unfortunately the government response, if it ever comes, will be too late to save Gaia if not the entire domestic economy which now, in morbid irony, lies in ruins in the country where soon the only remaining business will be showing off other, far more famous ruins to visiting tourists.

- 26848 reads
- Printer-friendly version
- Send to friend
- advertisements -


Just leave the EU already!
nahhhh.........its the PENSIONS.......its all about the PENSIONS
YV and Tsiparas are a joke. They could have told the IMF to get lost initially. I know the threat is they will be a banking paraiah but there are plenty of nation-states that would help them rebuild their economy. Besides that they could have reissued the drachma and backed it with some silver.
They could have used the hundreds of millions of dollars they lost to the IMF over the last 4 months and bought up enough silver to substantially back their currency. This not only would give them a sound currency but would have boosted price in silver due to supply/demand. SHit, they might have even triggered a comex default and the drachma could have triple in value over night.
Their pensions would be paid and their finance sector would have boomed.
OH FUCKING WELL!
You seem to forget that Greece is in the control of the zionist leeches and have a tight grip in all areas of goverment. They will not give up Greece due to the huge oil reserves recently found. Tsipras is playing his role brilliantly as a puppet of the State dept...................
Hail to the dear leader Alex Tsipras and the comrades of the central committee of Syriza for this great achievement. Shows you how brain dead the Greeks are when Syriza is still in the lead in polls.
Throw those pathetic Greeks out of Europe already.
And yet they still have money for spray paint graffiti.
They didn't "lose" those millions.
It was equivelent of a taking a cash advance on a credit card to pay the one that is due.
Soul G
You re talking about...Greeks! The last time the Greeks did anything right as defeating the Persians...The only reason that are even still relevant is because of geography.
Greece is working perfectly just like the Greeks always do. I don't understand why this is news. The only reason the Greeks have any leverage to even be able to beg is because of the 700 lbs Spanish Gorilla patiently waiting his turn. If the krauts cave to Greece then they will have to cave to the Spanish and the kraut public won't swallow that moneyshot.
The state is responsible for 1.3 of your 1.7 MM in revenue? That's the problem in a nutshell. Get off of welfare already or stop calling yourself a business owner.
Reminds me of an old adage about doing business with thieves. Hmmm....
Ever been within 50 miles of Washington D.C.? Same shit, but the revenues are in the billions.
Hey stupid, he sells medical supplies to hospitals. Most hospitals are public not private.
Hey fucking moron, maybe in Greece but that's not my problem. I own a construction company and we do maybe 5% pulic work, the rest private. If you're going to be a glamorized welfare parasite don't blame anyone else when the host dies. That was his choice. And 335M profit on 1.7MM in revenue is cuting a pretty fat hog. Boo fucking hoo. And public or private he sold to an entity with no ability to pay. Who exactly is the stupid one in this scenario? Jag off.
Nobody cares what you do shithead. Nobody cares if you think its your problem or not. Poor guy is in the medical supply business not on welfare you stupid cunt. Sounds like you're happy someone else is getting fucked because your business is in the shitter.
Yep. A full-bore central bank national asset-stripping project is nothing to stand in the way of.
YV and tsiparas have been educated to that end by the bankers in Brussels. The local guys facilitating an asset-stripping project make out pretty well.
They can leave the EuroZone without leaving the EU. The EuroZone are those countries which use the Euro.
They could of course use the Euro and a local currency.
Soul Glow: "Just leave the EU already!"
who? the UK? perhaps soon. Greece? nobody in Greece is talking about leaving the EU. The eurozone, perhaps, but not the EU
** ALERT **
Watch out ZeroHedge commenters. The DOJ could be coming for you.
http://motherboard.vice.com/read/the-government-wants-names-of-online-co...
I thought all this doomsday stuff was going to happen IF Greece left the EU and fired up the drachma? Looks like they get it anyway. Nothing to lose but your chains, kids.
You're walking the plank anyway. Take somebody with you. Default. Disengage. Drachmatize.
yawnnnnn.
Nobody cares the state of the empire over which they rule, so long as they rule over it absolutely.
What is happening in Greece is the fate of virtually every Western nation that borrowed too much.
US has debt and unfunded liabilities of $1,400,000 per taxpayer and rising at $70,000 per taxpayer per year mainly due to sky-high healthcare costs such as charging $800 for a $1 bag of saline water.
"Our country is broke. It's not broke in 75 years or 50 years or 25 years or 10 years. It's broke today," he told the Senate Budget Committee. "Indeed, it may well be in worse fiscal shape than any developed country, including Greece."
http://www.newsmax.com/Finance/StreetTalk/Kotlikoff-GDP-debt-deficit/201...
unfortunatly we can print our own money...so we will go the way of Germany in the 20s first...before we reset...hyperinflation to the moon..
We have massive inflation in the US already but it is papered over by fake economic statistics:
The Chapwood Index (real inflation) for 2014 was 9.7% and official CPI in the land of the free was only 0.8%. So real inflation was 1212.5% of the official number in 2014. And thus the nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.
The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively.
What is the Chapwood Index?
"The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."
http://www.zerohedge.com/news/2015-05-29/inaccurate-statistics-and-threa...
missed that one, great link, thanks for posting it.
Great lookin eye-you want some visine for that?
You know why US criminal politicians aren't bothered by that debt? They know American citizens hold $80 trillion in assets. We've been fed, we've been fattened, next comes the shearing, then the slaughter. A 25% 'one-time' (wink, wink) wealth tax would net the Fedcoats $20 TRILLION dollars.
Problem solved, bitches.
What do you think FATCA is really about? I think it's about making it difficult to hide the assets from the wealth tax. . .
I was thinking the 401(k)'s were the target. I read there is about 19 Trillion in 401(k)'s? That would get rid of the debt as the place collapses...
So Greek socialism has run out of other people's money. Looking forward to it in the US.
Nope. It's crony capitalism that run out of Greek people's money.
Otherwise Greek people would be rich and Wall Street, City, Frankfurt and Zurich bankers would be poor.
It's essentially collectivism/communism - has a 100% perfect failure record every time its tried.
Nope, because Syriza didn't make Greek debt, PASOK and Nea Demokratia did - crony Greek politicians colluded with crony bankers and crony corporations. How do you think that money was spent? Building schools and kindergartens? Swiss-like wages to population? Nope. It went on buying Siemens trains and whatnot and of course cronies on all sides split the loot. No one asked Greek people about it nor did an average Greek person benefited from it. Actually, asking average Greeks to now foot the bill would be manifestation of socialism - the same kind of socialism like in the U.S. where plebs is footing the Wall Street bills.
crony capaitalism basically is a form of socilaism , once those banks got bailed in 2008 capitalism was lost. Under a true capitalist system the zombie banks would have all failed in 2008 and we would now likely be back in growth.
No. Crony capitalism is crony capitalism.
I'm not defending socialism. It's shit, too. It's not even a system - it's a delusional ideology. But even in it's delusion it at least on paper has some ideals of social justice. On the othe,r side crony capitalism is just degenerate plutocracy - in essence no different than the pre-democracy antic Greece tyrannies or medieval despotic kingdoms and with no regards to anyone's wellbeing but plutocrats themselves.
Coming to a theater near you!
Bitcoin last price: $229.96
Issue arrest warrants for Blankfein and Dimon. Without no justice there is no justice.
Those 69 closings are just businesses that are no longer sending in taxes....they are still open..just under the table I bet...but they are lost to the government....and the old line if you dont pay...you get nothing....how that health company got that far in hock is his fault...you send anything to Greece now you are not getting paid....period
drachma,drachma,drachma,...................default
The result of Goldman doing God's work at its best
Well done on that whole negotiation thing.
Ditto to all comments
How much of the money Greece owes to banks... was created out of thin air?
Preaching to the choir, but its worth constantly reminding ourselves of the inherent, absurd injustice of stealing from the Greek people, and their labor, to pay back banks in blood, sweat, and tears what they loaned in ink.and paper.
Fuck the EU.
How much of the money Greece owes to banks... was created out of thin air?...
We all know the answer is somewhere in the neighborhood of 100%. The problem's that it was initially spent as if none of it was.
The highest valued currency was / is that currency which can be exchanged without receipts, which is why the US cyphrage with all the reporting entanglements and needless recordkeeping and pseudo "enforcement" threats associated with any entity caught using the stuff is rapidly losing favor.
I suspect Brics will start being used for trade soon as long as no one has to report transactions to the issuing agency, preferably a soverign entity and not some "bankers without borders" ghost.
jmo and hope.
Who talks about the Greek thug government that put the country in this situation?
Each former Greek goverment, including the present one, should publicly executed.
Does anyone else running an android tablet have problems with the sponsored ads popping up making the site virtually unreadable?
You should use Apple products !
I do, as boat anchors.
Current score
Missing the /sarc 6 not missing it 1
I have a desk top and it takes 30 seconds sometimes more to load a page....to many adds...and something called cross searching???
ghostery with firefox - no ads
use firefox, adblocker, flash block. No ads, no wait time, no fuss, no muss
This site sucked like this since forever. But, you get used to it over time. Like living with herpes.
If it runs Chrome as a browser, they make an Adblock add on.
yeah get firefox, and figure out how to add on...er.. add ons.. ghostery is good, but you can add a few different ad-blocking, and anti-ad-blocking add ons. get 3 or 4, including ghostery, and I like bluehell firewall... and you should be good.
Re Apple - I'll only say this, on their tablets and phones the browsers crash far less than most devices running android. Sorry - that's just some true shit for y'all muthafuckas.
___________________________________
Sent from my Piece of Shit Windows Tablet
The big Greek business want to strike a deal soon.
They will get paid and f* every other common Greek.
Biased pure propaganda article.
Assinine exclamations like 'Greece is not serious about reforms' these 'reforms' made the country loose 25% of GNP ! Butchery of the economy passes for reforms among the mindless foaming at the mouth right wing dingbats.
EU has overlived its practical usefulness, it is now destroying one country after another with Greece first.
Greeks need to grab an ouzo and leave the Euro sticking the finger to all the mindless hyenas .... then watch the EU collapse .
The choice for Greece is between certain destruction and exit from Euro, that much is clear, the choice the will make is clear too, despite the west's Mass Media propaganda.
Shit happens, Greek people taking it hard up the ass. Stop paying taxes to the government !
Austerity has killed off thousands of SME in Greece and put tens of thousands if not hundred of thousands of people into unemployment. Austerity cut people's spending power so they are buying nothing at small businesses.
"Austerity" is not the cause, it is the result after tyrants spent the money the people earned like fools. Socialism does not work.
Socialism works in Sweden and Denmark.
There's zero doubt about it.
Have you ever been?
Fantastic hash in copenhagen. Go during the summer, of course.
actually, "socialism" has been rolled back a bit, in Sweden. I guess it would be better to talk about percentages of social spending in the budget, instead of "socialism", and note if it's done on credit or not
in the same way, "Austerity" does not say much, in math terms. is it meant as meaning spending more then gathering in taxes? or more social spending, less military spending?
what is working in denmark and sweeden is not socialism, it is a powerful influence lobby of germanic tribe brotherhood ring spread around the world
this is something other "tribes" miss like the latins, the arabs, slavs etc
without that denmark and sweeden would be a venezuelan socialist nirvana
And the kings of this brotherhood mentality are of course the jews
So who is paying for their military protection in large part? Can do a lot of nice things with that money and a homogenous cooperative small population.
Seems if you didn't borrow way beyond your means to finance largesse, nobody would be talking about austerity. communism is a failure every time its tried. 100% consistent.
When this all falls apart....getting Greeks to start paying taxes again is going to be the big hurdle....a country will not work without some tax payments....and right now and after the fall there will be zero faith in any government employee
yes, but 14 salaries and 14 pensions in 12 month were good.
they didn't produce it, so, they have to give the rest of 2 pensions and 2 salaries back with interest.
Starving to death in s a very unpleasant way to go. But much more preferable and satisfying than giving a single cent to that ugly crippled cunt schauble or any of the other blood and cock sucking bitches over at the EU.
you say this because your tummy is still full
***soon***
As long as I can get Greek Gyros from a fat greasy Greek here in Murica then everythings fine
Why havent they left the EU left? Or will they just keep kicking the can
There is nothing fatter and Greasier than a diehard keynesian................................
So this would be a realistic model for a country that cant pay its debts AND whose currency cannot be conjured. In Amerika, the situation would be different due to the Fed's priniting press. There would be goods for sale, altho at a point, sellers of those goods would need to also pay up front, first in US dollars, then in another currency (once the hyperinflation took hold). Consumes would need their wheel-barrows to carry the paper to buy the bread and beans.
The hedge is a 6+ month of necessities, plus the ability to grow/fatten your own food for troubles lasting a longer period. Of course, guns, broads and whiskey are also essential to survival.
What ever slight of hand that they use... they are fucked and so are the banks holding their paper... Italy will be the one that blows everything up. Its too big a trud to fit under the rug.
BRING IT ON MOTHAFUCKAS!
real issue is "Suppliers demand cash upfront"
that means shortages are coming to greece very soon
The Greek Main Street economy, as seperate from financial serivces and banking, is in a deep depression and collapse. And just this moment in time, a flood of illegals immigrants from Africa and the Middle East are targeting Greece as their arrival point to the EU. No nation could be worse placed to take in tens of thousands of illegals. And it will only get worse, 100,000 illegals are on the coast of North Africa right now, all planning to set sail in the coming weeks. The EU has sent ships from their Navies to pick them up and transport them to Italy and Greece. Can Greeks sit quietly and allow the EU to facilitate this mass migration?
I urge people to watch this story, Main Stream Media say little, but this is going to break the EU wide open. 100,000 coming right now, 2 million are on the move to get to the coast, right now. Tens of millions saving money to pay trafficers to leave their African and Middle East homes.
Right now, the liberal in Europe are demanding big resettlement plans of each nation. Each EU nation expected to being to settle all illegals who arrive. No liberal or major poitican has ever said that they will stop accepting illegals. I really believe this story is "The Story" of 2015, it is the forst wave of vast migrations out of Africa, Asia and Middle East. All of them are seeking to liv ein the UK, or Sweden. If denied there, then they will accept France, Germany, Denmark etc. The two best welfare state are the desired settlement places! Surprised!
Give them all Greek passports or Schengen visas and put them on a train to Germany.
The game theory they are using is called Dine and Dash. Its an advanced form of the broken window theory where you skip the putting in new windows part.
Thats MMT in a nutshell. Very popular among governments these days.
>>> And with people's confidence in the banking system, the bedrock of every modern society, shaken, everything else follows
Coming soon to a G7 country near you.
Message to recently dead game theory guy and his illustrious followers...
Nature doesn't gamble, bluff, lie, ride or cheat, but it always wins.
The untold story is the great number of people who work...and don't get paid. Months of unpaid wages in many cases. They still go to work...because what else can they do? Some employers will strive to pay them when they can; others simply take advantage of the situation.
Other cases of people forced to work overtime without compensation. Because if they complain their employer will vengefully replace them. People qualified and hired as engineers...have a middle manager make them run to get their coffee--but I guess they should consider themselves lucky if that's all they face at their work environement.
How can this go on? Greece used to have protections against this. Workers could go to the labor inspector who vigorously defended their rights. That is all gone! "REFORMS" and "LABOR DEREGULATION". Get it? The labor inspector still exists in name only. Workers dare not lodge a complaint--if the employer finds out they will be out on the street.
SYRIZA wants to roll this back...but the TROIKA warns them to 'not roll back reforms' or else. And the media reports that SYRIZA is anti-reform and anti-modernization.
I'm amazed the Greeks take all this. Amazed they haven't risen up and told the EZ to fuck off and hanged their politicians who sold them out. But I guess if SYRIZA fails, that will be next.