UK SMEs have cut back trading with Greece, reports foreign exchange specialist Caxton FX, as stock purchases from the financially struggling nation drop 21% within a year.
The Greek bailout took place only one year ago, but with some commentators speculating that Greece may eventually default, and even abandon the euro altogether, the return journey toward trust in Greece is likely to represent something of an odyssey.
Rupert Lee-Browne, CEO of Caxton FX, explains how this has had a direct influence on UK businesses:
“The change has been obvious. There is an understandable lack of confidence from UK SMEs in the Greek market at the moment, and we’ve seen a drop-off in trade equivalent to over one fifth within a single year (21%). It is unlikely a default or euro-abandonment will take place in Greece anytime soon, but the fact that commentators are even discussing the possibility shows unstable the country’s financial situation has become.”
“SMEs are in a particularly good position to react to situations like this. They can move supplier or even alter their business model far quicker than a larger firm, and as a result they are ideally placed to react quickly and limit their risk exposure.”
The drop off in trade with Greece goes against the flow, as purchases from the rest of Europe have actually increased over the past year. Lee-Browne concludes:
“The eurozone accounts for over half of the UK’s foreign trade. Since the start of the year there has been a significant 18% increase in UK firms importing from the eurozone through Caxton FX. This increase highlights the significance of the drop off in trade with Greece.”