Impact of 20-day banking freeze on the market seen at 3 bln euros

The impact of three weeks of bank closures and capital controls in Greece has been estimated at some 3 billion euros, and that’s excluding the tourism sector.

Even if the credit system gradually returns to normal in the coming week, the market will take a long time to recuperate from the damage done over the last 20 days, given that the economy was already in a weakened state to start with.

The immediate impact on the market concerns the turnover lost in retail commerce at a time that would normally be the peak season for the sector. The medium-term consequences could constitute staff layoffs, not only in commerce but also in industry, in purchases lost and products that will not be exported.

According to estimates by commerce professionals, the first three weeks of capital controls have cost retail trade some 600 million euros, with the apparel sector taking the biggest blow, just as the summer sales window opened. Part of the expected turnover shifted to fuel and food purchases at first, but then these domains posted a drop too, thereby failing to contain the overall decline in retail commerce.

Estimates by the Panhellenic Exporters Association put the weekly revenue loss from the problems in exports at 80 million euros, or a total of 240 million euros to date. At the same time, the shortages in commodities due to problems in imports corresponds to products valued at 600 million euros per week, or 1.8 million euros so far. This is the cost facing importers that can’t bring in products to sell to their clients or industries that can’t get the raw materials they require to operate. The Athens Chamber of Commerce and Industry (EBEA) says that some 4,500 containers holding raw materials and finished products are currently blocked at customs while importers cannot perform any banking transactions.

Another problem is the backlog of checks and bills of exchange that cannot be paid, meaning that business transactions worth an estimated 6 billion euros have been frozen, according to the EBEA.

WebHotelier data point to a partial rebound in tourism bookings from foreign markets after the agreement reached between the government and its creditors on Monday, but at the peak of the three-week crisis new bookings had been down up to 50,000.