In Greece, firms pay a steep price for the crisis
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More positive noises are coming out of Europe on the subject of the Greek debt crisis. France’s president said Greece’s new request for a third bailout was “credible.” The Dutch head of the Euro group described it as “thorough.”
It’s far too soon to call the end of this crisis, which has, after all, dragged on for half a decade. But whatever happens next – and almost anything could happen – it’s worth reflecting on the extraordinary economic damage Greece has wreaked upon itself over the past two weeks. Many Greek businesses are bearing the scars.
“At the moment we’re 90 percent down in July,” says Costas Papadopoulos, the chief executive of DIOPTRA, one of Greece’s biggest publishing houses. “Think about it! Ninety percent. How can one survive?”
“Things have changed so dramatically in our lives and in our businesses,” he continues, “that at the moment I feel as if I’m a book specialist but in a different country that I don’t know anything about. I don’t know what people like any more. I don’t know how much I should print. I don’t know what’s the price of a book. I don’t know anything anymore.”
That sense of disorientation must be afflicting many Greek travel agents. Under the country’s capital controls, they are forbidden to send any money abroad and therefore their foreign suppliers — airlines and hotels — have to supply them on credit . But extending credit to a country that may crash out of the euro and find itself suddenly with a much weaker currency is dangerous.
Philipp Brinkmann, who runs the Tripsta online travel company, says that more than 35 airlines have refused to take any bookings from Greece. He says that makes it impossible for most Greek travel agencies to issue tickets for these airlines.
But Brinkmann isn’t teetering on the edge of disaster. Far from it. He’s half Greek and half German, and that accident of birth has helped his business enormously. He’s routing his ticket purchases through his German office, and with German planning, efficiency and exporting drive, he’s already expanded aggressively abroad.
“That has saved our company and driven our growth,” he says. “Between 2011 and 2015 we grew from having a staff of 35 to 300.”
That expansion abroad has left him well placed to shift his headquarters out of Greece if the country’s economy spirals out of control.
“It would make sense if things go really, really bad here in Athens, to relocate in order to have banking relations and in order to have the legal headquarters of the company in a more stable environment,” he says.
Given the turbulence of the past two weeks, businesses in Athens are understandably nervous. But behind the high walls and security cameras of a rather grim-looking compound near the airport, there’s a safe haven at hand.
Welcome to Athens 2 – a brand new, high-tech bolthole for companies fleeing civil unrest in the capital. Apostolos Kakkos, the head of Lamda Hellix, is the brains behind Athens 2.
“Things can go much worse, so, as you have in the desert, we’re an oasis, an oasis in the desert,” he said.
With its own power and water supply, Athens 2 can accommodate up to 700 people. Several large companies have signed up to use the complex in case they are forced to leave Athens.
“We must hope for the best but prepare for the worst,” Kakkos says.
As this week draws to an end, the air of imminent disaster — the prospect of a sudden uncontrolled exit from the euro — seems to be receding. But business has been badly bruised. And it may be some time before confidence recovers.