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Greek companies are ready for the worst…cash is already overseas

As Greece and its creditors head for a showdown that’s raising the spectre of the country’s exit from the euro or the imposition of capital controls, crisis-hardened company executives, say the drawn-out crisis has prepared them for the worst.

Alex Christoforou

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Post originally appeared on Bloomberg.

George Alevizos knows what it’s like to live with capital controls.

The finance manager at Fourlis Holdings SA, which has the franchise for Ikea furniture stores in Greece, Cyprus and Bulgaria, saw the company’s Cypriot sales fall about 30 percent in the three months immediately after that country’s rescue in March 2013.

Now as Greece and its creditors head for a showdown that’s raising the spectre of the country’s exit from the euro or the imposition of capital controls, crisis-hardened company executives, although nervous, say the drawn-out turbulence has prepared them for the worst.

“We have faced this kind of issue with the operation in Cyprus,” Alevizos said in an interview. “Short-term, however, there is always severe turbulence.”

Since Greece sparked the euro area debt crisis in 2009, companies have been living with banks unable to lend, an economy struggling to emerge from recession and the shadow of uncertainty over the country’s future in the euro area. The tumultuous times have taught them valuable lessons — from keeping their cash overseas to developing export markets, executives said.

That preparation may be put to the test as Greece and its creditors fail to strike a deal on reforms Prime Minister Alexis Tsipras has to deliver to get as much as 7.2 billion euros ($8.2 billion) from the country’s existing bailout funds. With the bailout program expiring at the end of the month, time may be running out. That could mean capital controls like those in Cyprus in 2013, the first in a euro country. Companies have been quietly preparing for that possibility.

Sarantis’s Story

Take Sarantis, a distributor of products ranging from Estee Lauder cosmetics to insect repellents. The company’s cash has been kept outside Greece since the Cyprus crisis. Sarantis would probably see a fall in sales as the cost of imported goods rise if there are capital restrictions or an exit from the euro, Kostas Rozakeos, the company’s chief financial officer, said in a call with analysts.

The upside to an exit from the euro would be that the company would have lower production costs because its cash is abroad and will remain in foreign currency, he said.

“At the end of the day, Sarantis will have benefits,” he said. “I don’t wish that as a citizen, as a Greek citizen, but talking about this as a businessman, I can see opportunities.”

Sarantis will be the big guy on the block as smaller, weaker rivals succumb to the Greek cash crunch, he said.

More than 100 billion euros of deposits held by businesses and households in Greece have left its banking system since the end of 2009, with losses deepening since the beginning of this year, when the anti-austerity Tsipras government came to power.

Block Flows

The stalemate in talks between Greece and creditors over the last few months prompted JPMorgan analysts to write on June 1 that the impasse makes capital controls more likely “to nail down bank deposits, preventing portfolio type flows.”

In some ways, the controls may be too little too late. Companies, reading the writing on the wall, have kept funds outside Greece when they could.

Titan Cement Co., which rode out the financial crisis in the U.S. in 2008 and a revolution in 2011 in Egypt, has most of its cash reserves overseas. Cyprus-style controls may be a possibility for Greece, although an exit from the euro seems unlikely, Chief Executive Officer Dimitrios Papalexopoulos told analysts on a call last month.

“We are net exporters, so we will have excess foreign currency rather than a shortage,” he said. International operations of the Athens-based cement maker are self-sufficient and the company has credit facilities from foreign, not Greek, banks, he said.

Sufficient Liquidity

Of Titan’s cash reserves of 138 million euros only 12 million euros are in Greece. About 70 million euros are with holding companies and European banks outside the country.

Dixon Carphone Plc, which owns the Kotsvolos appliance chain, has had contingency plans in place for a Greek euro exit since at least May 2012, when Tsipras’s Syriza party emerged on the political scene as a potential contender to run the country.

“We have plans in terms of how our stores will close and reopen, we have plans in terms of how we manage consumer credit arrangements and we have a plan in terms of how we make sure that we get stores open and trading as quickly as possible,” Chief Executive Officer Sebastian James said at the time.

He repeated this month that the events may present an opportunity to gain market share.

Hellas Direct, a Cyprus-based car insurer operating in Greece in which U.S. billionaire Daniel Loeb’s Third Point Hellenic Recovery Fund has a 20 percent stake, has always kept cash out of Greece and Cyprus.
In Greece, “we only keep operational cash locally and sweep up capital on a weekly basis,” said Alexis Pantazis, co-founder of the company. “Even in the case of capital controls being imposed, we would have sufficient liquidity to continue as is.”

References:

http://www.bloomberg.com/news/articles/2015-06-16/greek-capital-controls-baked-in-as-companies-store-cash-abroad

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Latest

Trump Has Gifted “No More Wars” Policy Position To Bernie Sanders (Video)

The Duran Quick Take: Episode 148.

Alex Christoforou

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RT CrossTalk host Peter Lavelle and The Duran’s Alex Christoforou discuss how US President Donald Tump appears to have ceded his popular 2016 ‘no more wars’ campaign message and policy position to Bernie Sanders and any other US 2020 candidate willing to grad onto a non-interventionist approach to the upcoming Democrat primaries.

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“Is Bernie Stealing Trump’s ‘No More Wars’ Issue?” by Patrick J. Buchanan…


The center of gravity of U.S. politics is shifting toward the Trump position of 2016.

“The president has said that he does not want to see this country involved in endless wars… I agree with that,” Bernie Sanders told the Fox News audience at Monday’s town hall meeting in Bethlehem, Pennsylvania.

Then turning and staring straight into the camera, Bernie added:

“Mr. President, tonight you have the opportunity to do something extraordinary: Sign that resolution. Saudi Arabia should not be determining the military or foreign policy of this country.”

Sanders was talking about a War Powers Act resolution that would have ended U.S. involvement in the five-year civil war in Yemen that has created one of the great humanitarian crises of our time, with thousands of dead children amidst an epidemic of cholera and a famine.

Supported by a united Democratic Party on the Hill, and an anti-interventionist faction of the GOP led by Sens. Rand Paul and Mike Lee of Utah, the War Powers resolution had passed both houses of Congress.

But 24 hours after Sanders urged him to sign it, Trump, heeding the hawks in his Cabinet and National Security Council, vetoed S.J.Res.7, calling it a “dangerous attempt to weaken my constitutional authorities.”

With sufficient Republican votes in both houses to sustain Trump’s veto, that should be the end of the matter.

It is not: Trump may have just ceded the peace issue in 2020 to the Democrats. If Sanders emerges as the nominee, we will have an election with a Democrat running on the “no-more-wars” theme Trump touted in 2016. And Trump will be left defending the bombing of Yemeni rebels and civilians by Crown Prince Mohammed bin Salman of Saudi Arabia.

Does Trump really want to go into 2020 as a war party president?

Does he want to go into 2020 with Democrats denouncing “Trump’s endless wars” in the Middle East? Because that is where he is headed.

In 2008, John McCain, leading hawk in the Senate, was routed by a left-wing first-term senator from Illinois, Barack Obama, who had won his nomination by defeating the more hawkish Hillary Clinton, who had voted to authorize the war in Iraq.

In 2012, the Republican nominee Mitt Romney, who was far more hawkish than Obama on Russia, lost.

Yet, in 2016, Trump ran as a different kind of Republican, an opponent of the Iraq War and an anti-interventionist who wanted to get along with Russia’s Vladimir Putin and get out of these Middle East wars.

Looking closely at the front-running candidates for the Democratic nomination of 2020 — Joe Biden, Sanders, Kamala Harris, Beto O’Rourke, Pete Buttigieg, Elizabeth Warren, Cory Booker — not one appears to be as hawkish as Trump has become.

Trump pulled us out of the nuclear deal with Iran negotiated by Secretary of State John Kerry and reimposed severe sanctions.

He declared Iran’s Islamic Revolutionary Guard Corps a terrorist organization, to which Iran has responded by declaring U.S. Central Command a terrorist organization. Ominously, the IRGC and its trained Shiite militias in Iraq are in close proximity to U.S. troops.

Trump has recognized Jerusalem as Israel’s capital, moved the U.S. Embassy there, closed the consulate that dealt with Palestinian affairs, cut off aid to the Palestinians, recognized Israel’s annexation of the Golan Heights seized from Syria in 1967, and gone silent on Bibi Netanyahu’s threat to annex Jewish settlements on the West Bank.

Sanders, however, though he stands by Israel, is supporting a two-state solution and castigating the “right-wing” Netanyahu regime.

Trump has talked of pulling all U.S. troops out of Syria, Iraq and Afghanistan. Yet the troops are still there.

Though Trump came into office promising to get along with the Russians, he sent Javelin anti-tank missiles to Ukraine and announced a pullout from Ronald Reagan’s 1987 INF treaty that outlawed all land-based intermediate-range nuclear missiles.

When Putin provocatively sent 100 Russian troops to Caracas — ostensibly to repair the S-400 anti-aircraft and anti-missile system that was damaged in recent blackouts — Trump, drawing a red line, ordered the Russians to “get out.”

Biden is expected to announce next week. If the stands he takes on Russia, China, Israel and the Middle East are more hawkish than the rest of the field, he will be challenged by the left wing of his party, and by Sanders, who voted “no” on the Iraq War that Biden supported.

The center of gravity of U.S. politics is shifting toward the Trump position of 2016. And the anti-interventionist wing of the GOP is growing.

And when added to the anti-interventionist and anti-war wing of the Democratic Party on the Hill, together, they are able, as on the Yemen War Powers resolution, to produce a new bipartisan majority.

Prediction: By the primaries of 2020, foreign policy will be front and center, and the Democratic Party will have captured the “no-more-wars” political high ground that Candidate Donald Trump occupied in 2016.

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Over 200 killed, hundreds injured in series of blasts at Sri Lankan hotels & churches

A series of bombings hit churches and hotels across Sri Lanka on Easter Sunday, killing more than 200 people.

RT

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By

Via RT…


A series of eight explosions rocked Catholic churches and luxury hotels in Sri Lanka as Christians began Easter Sunday celebrations, with over 200 killed and hundreds injured, media reported, citing police.

The blasts started at around 8:45am local time at St. Anthony’s Church in Colombo and St. Sebastian’s Church in Negombo, a Catholic-majority town outside of the capital. The Zion Church in Batticaloa on the eastern coast was also targeted. At around the same time, the Shangri-La, Cinnamon Grand and Kingsbury five-star hotels were also hit, police confirmed.

Two more explosions happened later in the day, targeting two more locations in Colombo. All attacks appear to have been coordinated.

At least 207 people were killed, Reuters reported, citing police. More than 450 were injured in the attacks.

Alleged footage of the aftermath, shared on social media, showed chaos and large-scale destruction inside at least one of the churches.

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Mike Pompeo reveals true motto of CIA: ‘We lied, we cheated, we stole’ (Video)

The Duran Quick Take: Episode 147.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a look at a Texas A&M University speech, and subsequent interview, with US Secretary of State Mike Pompeo.

The former CIA Director admitted, ‘as an aside’ to the question asked, that the Intelligence agency he headed up before being appointed as the top US Diplomat had a motto “we lied, we cheated, we stole”…which, according to Pompeo, contained entire CIA training courses based on ‘lying, cheating and stealing.’

Pompeo finally speaks some truth.

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