NYT: Trucks Full of Cash at Greek Borders, Should The Country Exit the Euro

Posted by in Economy

I try to paint in my mind the picture… How a fictive scenario would look like in reality: two, three, four… trucks full of thousands fresh-printed banknotes in US-Dollars parked near a border post to Greece – in Albania, FYROM, Bulgaria or Turkey.  Bored and unsaved truck drivers, resting their feet on the wheel, chewing on a toothpick. Armed to the last bone to protect their precious load from bandits’ attacks, the drivers are anticipating for the hand over. Their clients are employees at U.S. companies in Greece. The country had just exited the euro zone, the banks were closed, no money would be allowed to enter or exit the country. And yet. Provident heads of these U.S. companies had ordered cash in advance so that they could pay their personnel, clients and suppliers in bankrupt Greece. What the sci-psi-fiction scenario does not say, is that the U.S. companies would break the law, if they would try to “import” cash to Greece – illegally.

The trucks-full-of-cash script is apparently prepared by Bank of America Merrill Lynch, as the global leader in finances has already worked out down to the last details a contingency plan, should debt-ridden Greece exit the euro zone. Merrill Lynch is one of the U.S. companies getting ready for the worst. Another U.S. company, is preparing to send cash to its Greek branch personnel per train – even though Greek trains do not travel to or come from abroad anymore.

These are just some of the several examples featured at New York Times article: U.S. Companies Brace for an Exit From the Euro by Greece. Some plan to send cash to Greece, others reconfigure computers in order to be able to immediately handle the new currency.

U.S. Companies Brace for an Exit From the Euro by Greece

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.

  • Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable.
  • Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.
  • JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.

Fifteen months ago when we started looking at this, we said it was unthinkable,” said Heiner Leisten, a partner with the Boston Consulting Group in Cologne, Germany, who heads up its global insurance practice. “It’s not impossible or unthinkable now.”

Mr. Leisten’s firm, as well as PricewaterhouseCoopers, has already considered the timing of a Greek withdrawal — for example, the news might hit on a Friday night, when global markets are closed.

A bank holiday could quickly follow, with the stock market and most local financial institutions shutting down, while new capital controls make it hard to move money in and out of the country.

“We’ve had conversations with several dozen companies and we’re doing work for a number of these,” said Peter Frank, who advises corporate treasurers as a principal at Pricewaterhouse. “Almost all of that has come in over the transom in the last 90 days.”

He added: “Companies are asking some very granular questions, like ‘If a news release comes out on a Friday night announcing that Greece has pulled out of the euro, what do we do?’ In some cases, companies have contingency plans in place, such as having someone take a train to Athens with 50,000 euros to pay employees.” (Full Article Here)

Why the U.S. companies are preparing now for the euro exit, when the whole EU is assuring that Greece cannot leave the euro zone is, of course, a question that needs to be answered. Why now and thus with one year delay? I guess, it must have something to do with the U.S. presidential elections. Or not?

PS Nice consulting, guys!

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