Closures, shortages loom as insurers exit Greece

Mon Jun 4, 2012 11:00am EDT
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By Karolina Tagaris

ATHENS (Reuters) - Faced with the prospect of closing his family business and looking for work in Greece's sickly economy at the age of 65, Alkis Iliadis bemoans a decision by trade insurers to stop covering exports to his debt-choked country.

"This may be the final blow to the Greek market," said Iliadis, chief executive of a small firm that distributes solar panels, materials for diamond tool makers and chemicals and machines for the marble processing industry across Greece.

"We depend on imported goods. The future looks very dark and we're very afraid," he said.

Days after the world's two biggest trade credit insurers - Euler Hermes and Atradius - said they had stopped providing cover for export shipments to Greece due to mounting fears that Athens could be forced out of the euro, firms and trade lobbies are painting a grim picture of what lies ahead.

Echoing the pain of similar small firms that make up a big chunk of the economy, Iliadis, secretary-general of the Athens Association of Trade Representatives, said it was impossible to order anything on credit, forcing him to burn through cash reserves to pay upfront.

"We used to buy machinery to cut marble from a Korean company with payment up to 10 months after delivery. Now we have to send the money with the order. First we pay, then they dispatch," he said. "This lack of trust is catastrophic."

The move by Euler Hermes and its rivals, including third-ranked Coface which halted credit cover in November, reflects anxiety ahead of a June 17 election seen as a referendum on the country's future in the euro.

Such insurers cover exporters against the risk of not getting paid.   Continued...

A hall of the Imperial hotel is seen empty during the last day of its operation in Athens May 31, 2012. The large five-star central Athens Imperial Hotel closed down on Thursday a victim of the economic crisis in Greece, as several hotels have shut their doors in the country since the crisis began. Hotel officials said the impact of the crisis, with the downgrade of the city centre, and the reduction in tourist traffic, contributed to the closure of the hotel. REUTERS/John Kolesidis