Trade with Greece
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ply prove the rule. For all the above
reasons, loan applications are not
approved by banks —and, there-
fore, no money comes out of their
branches— and, given that, at least
for the time being, there is not other
alternative, the liquidity asphyxia is
reaching the point of complete suffo-
cation.
This is turning into a domino effect,
since it has repercussions else-
where (or, to be more precise,
“everywhere”, as the author was
told). For example, it has repercus-
sions on bad debts. The problem
there is highly complex, in all
regards.
First, things seem to have gotten
out of control for quite some time
now, given that, according to rather
conservative estimates, the bad loan
ratio —even in the business lending
segment— has reached 40% on
average (i.e. in regard to small,
medium-sized and large enterpris-
es).
This is an unprecedented figure,
capable of undermining the future
of any country.
What is even more worrying is that
even among large enterprises —at
least those that still remain in the
country— the bad loan ratio has
exceeded 30% and keeps on rising.
The situation is even worse among
SMEs, as shutdowns have become
an ordinary feature of a harsh reali-
ty. The death blow was mainly dealt
by the imposition of the capital con-
trols.
A banker recounted the following
telling story:
Unbelievable,
but revealing
“Before the capital controls were
imposed, a major Greek manufac-
turing company used to give its
packaging material orders to a sup-
plier based in Northern Greece;
after the restrictions were imposed,
however, this supplier announced
that it was unable to honour its com-
mitments.
“Thus, the manufacturer had to ask
its Balkan subsidiary to lend it some
