Though Greece is not among Turkey's top export partners, an ongoing economic crisis in the cash-strapped country has jolted Turkish exporters, particularly because of possible indirect effects of the neighbor potentially failing to reach a final compromise with its creditors.
A senior International Monetary Fund (IMF) official tweeted early on Wednesday that Greece is in arrears after Athens missed the deadline for the repayment of a bailout loan worth 1.6 million euros. As the reform package asked for by the IMF and other international creditors is taken to a referendum on Sunday by Greek leader Alexis Tsipras, many scenarios, including an exit from the eurozone -- an option often referred to as “Grexit” -- have loomed on the horizon. While debates over what future awaits the embattled neighboring nation remain hot on the agenda, Turkey ponders ways to evade the likely results of a Grexit.
In an interview with the Hürriyet daily, Tevfik Bilgen, the president of the Turkish-Greek Business Council at the Foreign Economic Relations Board (DEİK) warned Turkish exporters against deferred payments and said: “Our trade volume with Greece has been in decline since the crisis first emerged. [But] recent developments have put the case in a different light. None of our companies have yet failed to receive cash for exported products. However, exporters should not deliver goods to [their Greek customers] unless they get payment [upon delivery].”
Last year, Greece was Turkey's 25th largest export partner, with $1.5 billion in sales earned that year, according to Turkish Exporters Assembly (TİM) data. “The corresponding amount may slump to $1 billion in 2015,” Bilgen warned. Chemical products, steel and textiles are among the major Greece-bound Turkish export items.”
Hikmet Tanrıverdi, the chairman of the İstanbul Textile and Apparel Exporters' Union (İTKİB), also predicted that this year's volume of exports to Greece would probably fall behind that of the previous year. After a 9.1 percent year-on-year increase, Turkish exports to Greece suffered a 19 percent decline in the first five-month period, Tanrıverdi explained, adding: “I suppose the drop will extend in June. It doesn't seem possible to talk about a recovery in the Greek economy in the short term.”
The president of the Footwear Industrialists Association of Turkey (TASD), Hüseyin Çetin, also highlighted the collapse in exports. “We increased our footwear exports to Greece by 50 percent, from TL 7 million in 2013 to TL 10.5 million, in 2014. Despite prospects of [another] 50 percent rise this year, these exports dropped by 3.5 percent in the first six months due to the economic crisis. Difficulties receiving payment have emerged because of the crisis,” he said.
Echoing Tanriverdi's words, Çetin said: “Now they offer purchases to our manufacturers with installment plans. However, our companies don't take up these offers because of payment risk, as their banks are no longer creditworthy.”
While some business unions have mostly focused on the direct effects of the troubles in Greece, some are concentrating on possible indirect extensions of the crisis.
Turkish Clothing Manufacturers' Association (TGSD) Chairman Şeref Fayat pointed to likely indirect effects, saying: “The Greek default doesn't pose a big threat for us, as it is not among the large markets for the Turkish ready-to-wear industry. However, this period may be a problem if Greece exits the eurozone. If this happens, the euro will depreciate against the US dollar, and it will get us in trouble, since our regular customers are [from all over] Europe.”
Turkish Steel Exporters Union (ÇİB) Chairman Namık Kemal Ekinci, meanwhile, told Sunday's Zaman that Greece, where steel exports amounted to some 1 million tons in 2014, imported around 1.4 million tons of steel in the same year, of which some 200,000 tons were bought from Turkey, the second largest steel provider to the country. Ekinci said that if Greece does leave the eurozone and reverts to its former currency, the drachma, Turkish steel exports to the neighbor would eventually shrink. Ekinci added, “They would be able to offer more competitive prices than our firms to foreign markets, which may also pose a crucial problem [for Turkish firms].”
Ekinci went on to say: “The ÇİB finds it important that Turkey may be able to help Greece pay its debts.” When remarking on developments early this week, the Turkish minister for economic affairs, Nihat Zeybekci, told reporters that Turkey would consider options, in the event Greece officially requests help.
In an e-mail to Sunday's Zaman, Rahmi Çuhacı, the president of the Young Businessmen's Association of Turkey (TÜGİAD), also addressed indirect implications of the ongoing woes.
“If Greece decides to leave the eurozone, it may, contrary to popular belief, have positive effects on the value of the euro, as a turbulent region would be out of the zone. […] Still, we have problems beyond that of a crisis that stems [from] poor financial records. A Grexit scenario may trigger a domino effect. The current state of the crisis may change after other countries that are suffering economically such as Italy, Spain and Portugal leave the zone. Then, there would be uncertainty over the [current] structure and the future of the European Union.”
When asked about the current impacts of the crisis on Turkish exporters, Çuhacı reiterated the warning in DEİK's statement and said: “The main problems for Turkish firms engaging in business with Greek counterparts now are concerns over [safe] payment. As the crisis has been going on for a long time, some exporters have already taken measures. Still, hard times linger for companies with receivable debts. […] The future of Greek lenders is a bit vague.”
Though Greece is not among the main trade partners of Turkey, Çuhacı maintained that sales of daily-use products could be influenced in tourist locations such as Muğla, Bodrum, Marmaris and Kuşadası, where Greek nationals living on neighboring islands often visit to shop. Çuhacı continued, “Unfortunately, we will not be able to speak of any trade between the two countries if the referendum yields a ‘No,' and money transfers by Greek lenders are limited.”
Source: .todayszaman.com
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