Stresses on Greece’s critical inbound supply chain

The stresses on Greece’s critical inbound supply chains are entering uncertain and potentially perilous territory after Greeks voted against terms for a new bailout, according to Paul Page writing in the Wall Street Journal.

The WSJ’s Costas Paris and Juliet Samuel report that small merchants and importers of luxury goods were having difficulty sourcing goods even before the vote, with foreign suppliers asking for upfront payments for orders. Many Greek importers rely on letters of credit from local banks that then seek guarantees from international banks. That system is fraying under Greece’s new capital controls, and imports of crucial goods like medicine and food may be threatened if the financial ties are broken. Sunday’s Oxi vote puts Greece into a race to secure new financing before a European Central Bank bond payment is due July 20. See WSJ article.