Global markets unfazed by Greek "no" vote on bailout terms


In a referendum on 5 July, Greeks voted to reject austerity measures

The next day of the referendum raises a lot of questions for all businesses – maybe less so for companies like [Korres] that are so active abroad – but most importantly for every single Greek citizen. — Dimitris Vidakis, Korres

Following a historic vote in Greece against austerity measures, global markets dipped slightly on Monday and then steadied today. The Euro also lost some value on Monday and is holding at an exchange rate of $1.0957 at publication time.

Despite warnings that that a "no" vote could lead to Greece leaving the eurozone and the European Union, and after months of discussions with its creditors – the European Commission, International Monetary Fund and European Central Bank - Greece overwhelmingly voted in a referendum on 5 July to reject proffered bailout terms, with 38.7% voting "Yes" and 61.3% voting "No" to increased taxes and reduced welfare spending.

If Greece defaults on the loans held by the creditors, according to the Financial Times, the country could face bankrupcy, and would have to borrow €25bn or print its own currency to avert economic disaster.

Among many other Greek businesses, cosmetics brands based in Greece such as Korres and Apivita will be impacted by the country's financial plight. "The next day of the referendum raises a lot of questions for all businesses," Dimitris Vidakis, CEO of Korres, said to Cosmetics Business, "maybe less so for companies like ours that are so active abroad - but most importantly for every single Greek citizen."

Multinational Greek companies such as Korres may indeed be in the best position to withstand the upheaval. "Korres comes from Greece and almost half of its business – a half that has been growing steadily over the last years despite the crisis – is within borders; the other half includes priority markets worldwide including USA, Germany, Spain and UK. Operations-wise – production and distribution – the brand is as strong as ever. Sales-wise, it has just come out of an extremely successful first quarter: €3m 2015 – net earnings in Greece and abroad quadrupled."

"It is too soon to make any predictions," said Vidakis, "but as with all healthy companies out there, we have been working on strategies that can cater for each possible scenario. The rest is now down to our government and European partners."

Eurozone heads of state will hold an emergency meeting 7 July, and Greek Prime Minister Alexis Tsipras announced on television that "Greece will go back to the negotiating table and our primary priority is to reinstate the financial stability of the country." The negotiations will not include Greek finance minister Yanis Varoufakis, who resigned 6 July.

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In the meantime, banks in Greece have been closed for a week, no transfers of funds abroad are permitted and withdrawals are limited to €60 per day.