Foreign companies leave Greece

Several foreign companies in Greece operating in the trade, insurance and pharmaceutical sectors, among others, have decided to leave the country due to the increasing number of problems caused by the financial crisis. The evolution of the situation, as reported by the Kathimerini newspaper, has shown that such a choice has been wise. Consumption is progressively decreasing along with salaries and pensions, austerity measures and tax increases are further weighing on family incomes and the government has failed to take measures in order to cut red tape and implement fiscal policies encouraging companies to invest in Greece. Morever state debts to local and foreign businesses have never been repaid. The companies which have therefore chosen to leave Greece are many, some of them very well known. The recent suspension of all activities in Greece of French credit insurance company Coface, a branch of investment bank Natixis, has had a deep impact on retailers. Coface's announcement in June that it would stop signing new insurance contracts concerning exports to Greece was due to the fact that the company was facing increasing problems in receiving payments from Greek importers. The step left wholesalers of electric and electronic equipment and retailers in general without the insurance protection they had received since 2000. In the same period, the Euler Hermes - a branch of Credit Agricole, the largest commercial insurance company worldwide - announced it would stop providing insurance for goods imported to Greece for fear the country might leave the 17-member euro currency. Saturn was the last foreign company to leave the Greek market of electric and electronic devices. The first to leave were Electroworld and Fnac, the largest European franchise of high tech and cultural goods. In the past few days another foreign company, Univel, which produced electronic security systems and other high tech devices in Greece, left the country and moved production to Romania. The same trend is being registered in the pharmaceutical sector which used to be very prosperous. A number of foreign companies operating in Greece have started to study the cost of severance payments as they are planning to fold their local branches. Other pharmaceutical companies have limited their commercial activities and are trying to sell their stocks. Among them is Bristol Myers Squibb which recently fired 55 employees, most of them sales reps, due to the failure of former Greek governments to update drug prices in relation to production costs, which led the company to the choice of not introducing new medicines on the Greek market. Meanwhile Germany's Biotest announced they were closing their Greek branch and that the company will not export to Greece anymore due to the large number of unpaid bills.