Mon September 3, 2012
Trucks Full Of Cash: U.S. Firms Make Plans For Greece Euro Exit
Originally published on Mon September 3, 2012 7:41 am
European leaders have vowed to do all they can to keep the eurozone intact, but U.S. companies are making contingency plans in case Greece is forced to leave the currency union.
The New York Times said major U.S. banks and corporations are "preparing for what was once unthinkable" — Greece's exit from the eurozone:
"Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency."
The newspaper adds:
"JPMorgan Chase ... is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries."
And Peter Frank, who advises corporate treasurers as a principal at Pricewaterhouse, tells the Times:
"Companies are asking some very granular questions, like 'If a news release comes out on a Friday night announcing that Greece has pulled out of the euro, what do we do?' In some cases, companies have contingency plans in place, such as having someone take a train to Athens with 50,000 euros to pay employees."
European leaders have insisted that the continent's debt crisis can be managed and the eurozone can remain intact. On Thursday, European Central Bank President Mario Draghi is expected to outline a bond-buying program aimed at lowering borrowing costs for debt-strapped governments including Spain and Italy.
Germany's central bank, the Bundesbank, and its head, Jens Weidmann, oppose a big escalation in the ECB's bond-buying strategy. They say it risks breaching the EU treaty provision barring the ECB from directly backing governments, the Associated Press reports. Chancellor Angela Merkel, however, has indicated she's open to the ECB's plans.
"It's difficult for the ECB to do anything dramatic on Thursday, but they've got to give the impression they're willing to," ING rate strategist Padhraic Garvey told Reuters.