Tuesday, May 29, 2012

Companies Bracing For Greeks To Exit The Euro

Get ready to rock and roll on June 18th when Greece exits the Euro.
Companies doing business in Greece are drawing up a exit preparations checklist: 

1) Buy shutters to shutter up stores in case of riots
2) Change ability to accept Drachmas in business transactions
3) Pull cash out of Greece
4) Lower stock and inventory levels
5) Demand cash on delivery of goods and services 

... and they are basically covering all of their exposures in a financially unstable Greece.
The London-based Association of Corporate Treasurers says businesses should take precautions such as demanding cash on delivery and writing sales contracts in another currency such as pounds or dollars.

"Businesses need to build in protection by checking payment terms, sweeping cash out of subsidiaries and into other currencies and check on the vulnerability of suppliers," said Martin O'Donovan, ACT's deputy policy and technical director.

KPMG's Bayly advises his clients to check the six Cs when preparing for a possible Greek euro exit: cash, contracts, continuity, counterparties, control and commercial.

The Greek population better be stocking up on food and other necessities because it's likely to be a very bumpy ride.

One bright spot for any aspiring fiat printing entrepreneur: Some company that can print up banknotes in a hurry will be making a fortune printing up new Drachmas!