By G. Palaitsakis
Creditors’ representatives appeared unwavering in a standing request by the leftist Greek government to legislate a provision that allows businesses and companies to designate a special bank account that will be immune to third party demands for payment.
Ostensibly, such an account would protect incoming revenue and allow for the normal disbursement of money towards meeting monthly payrolls and obligations to the tax bureau and social security funds.
Nevertheless, creditors’ representatives – now part of the “quartet” – reportedly nixed all of the proposals eagerly tabled by the Greek side over the weekend. The same issue was also brought up in negotiations with FinMin Euclid Tsakalotos and his close aides on Sunday, but with the same negative result.
A most recent “compromise” proposal by Athens, namely, a “partially protected” bank account for receivables, was also shot down.
The main argument set forth by the Greek side – which is firmly planted in Greece’s commercial reality – holds that such a protected account would further boost the use of electronic transactions in the country, in lieu of cash payments that are often made “off-the-books” and without any receipt exchanging hands.
Although electronic transactions using debit and credit cards, along with web banking, have skyrocketed in the country – especially in the aftermath of capital controls imposed in late June 2015 – a very large portion of the economy is still conducted off-the-books. According to the government, a business or shopkeeper threatened with seizure of money flowing into bank accounts will insist on cash-only transactions.
Conversely, creditors’ representatives said allowing such a “loophole” essentially works as a type of preferential and pressure-free instalment plan for businesses with long-overdue arrears to the tax bureau, pension funds and suppliers.
Additionally, the “quartet” experts said thousands of otherwise healthy businesses and stores will be enticed into eschewing timely payments of obligations.
