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Potential implications of Syriza triumph in Greece in terms of currency, rates and billing
Thread poster: Huw Watkins

Huw Watkins  Identity Verified
United Kingdom
Local time: 22:34
Member (2005)
Italian to English
+ ...
Jan 26, 2015

I am a UK-based translator who works predominantly with EU-based agencies. I may be getting way ahead of myself here, but I am starting to mentally prepare for some potentially very significant changes in the EU set-up in the coming years.

If Greece ends up dropping out of the single currency, it may really open the door to the rest of the struggling Southern European countries to follow suit - I'm thinking particularly of Italy, Spain and Portugal. While I only work with Greek-based agencies on rare occasions, the other countries are definitely ones I work with quite regularly.

Has anyone else been thinking about this? How would you go about billing them? If their currencies get significantly devalued to combat the economic climate does it mean that we are looking at a rates drop to match?

My thoughts have been to potentially swap from billing in EUR to billing in GBP. What are people's impression of this approach?


 

Tom in London
United Kingdom
Local time: 22:34
Member (2008)
Italian to English
Far too soon Jan 26, 2015

You're getting away ahead of yourself. Keep calm and carry on.

 

Alexander Matsyuk  Identity Verified
Ukraine
Local time: 00:34
Member (2005)
English to Russian
+ ...
Good question Jan 26, 2015

I would like to add my sub-question to the discussion:
What should we do if, according to some forecasts, 1 USD and 1 EUR reach/are reaching the same value, approx. 1:1 exchange rate?


 

Antonio Fajardo  Identity Verified
Spain
Local time: 23:34
Member (2011)
English to Spanish
+ ...
Forex account Jan 26, 2015

Either invoice in your currency, either open a Forex account with a trusted broker and hedge your currency riskicon_smile.gif

 

Mervyn Henderson  Identity Verified
Spain
Local time: 23:34
Member
Spanish to English
+ ...
As Tom says ... Jan 26, 2015

... too early to say. I can just hear all those expert Talking Heads on TV sofas all over Europe this morning: "Of course, as George pointed out a little earlier, Simon, it's much too early to say".

 

Assimina Vavoula
Greece
Local time: 00:34
Member (2005)
French to Greek
+ ...
Too soon... Jan 26, 2015

Greetings from Athens, Greece...
You worry too much... It's very soon... Be optimistic...
Greeks are not stupid, you know... I work with agencies in the UK and in other European countries... I do not want any changes; the feelings of my colleagues are the same too. We believe in the European Union, but on equal terms.
You should not believe everything you read in the newspapers...


 

Laura Tridico  Identity Verified
United States
Local time: 17:34
Member (2006)
French to English
+ ...
"Hedge" by increasing regional diversity of your customer base Jan 26, 2015

I've lived in the US, Belgium and now the UK over the past 8 years, and currency swings are nothing new. I've learned that I can "hedge"somewhat by having customers in both North America and Europe, setting rates in the different local currencies. When one goes up, another may go down, but things tend to balance out for the most part.

That said, I don't see the Euro gaining a lot of strength in the coming months (barring unforeseen developments, which can always happen).

Laura


 

RobinB  Identity Verified
United States
Local time: 16:34
German to English
Parity Jan 26, 2015

amatsyuk wrote: I would like to add my sub-question to the discussion:
What should we do if, according to some forecasts, 1 USD and 1 EUR reach/are reaching the same value, approx. 1:1 exchange rate?


The prospect of euro/dollar parity has been touted for several months now (and most prominently by a number of bulge bracket banks), and it’s still on the cards. But the main drivers of future euro/dollar movements are likely to be, first, the success (or not) of “Super Mario’s” QE programme and, second, the strength of the US recovery, rather than the Grexit. However, please remember that the euro was overvalued - and the dollar undervalued - for many years, and a correction was inevitable. And, as corrections tend to do, they overcorrect first.

The chances of other “warm water” EU member states (as they were described recently in a report I read) leaving the euro are extremely remote as things stand today, though that doesn’t mean the euro won’t come under further pressure from short sellers in particular.

As far as the Grexit is concerned, the main question is, cui bono? Certainly not the Greek economy, and certainly not the people of Greece. But it’s amazing what some people will do for short-lived political gain.


 

Huw Watkins  Identity Verified
United Kingdom
Local time: 22:34
Member (2005)
Italian to English
+ ...
TOPIC STARTER
I certainly don't think Greeks are stupid Jan 26, 2015

Assimina Vavoula wrote:

Greetings from Athens, Greece...
You worry too much... It's very soon... Be optimistic...
Greeks are not stupid, you know... I work with agencies in the UK and in other European countries... I do not want any changes; the feelings of my colleagues are the same too. We believe in the European Union, but on equal terms.
You should not believe everything you read in the newspapers...


I know many Greeks and attend the Greek Orthodox church here in Cardiff so I get the Greek view a lot. My feeling is that dropping out of the Euro would actually benefit Greece's economy - the inherent flaw in a single currency for countries with such vastly different economies is that it is impossible to counter-act times of economic difficulty by devaluing the currency (essentially printing money) and thus boosting exports, tourism and so on. When the EU took on the single currency, Germany actually went in in a position of a deflated currency whereas the Southern European countries went into an inflated currency scenario. At least that is one opinion that is proffered widely in economic forums and periodicals.

Dropping out of the single currency is not the same thing as leaving the EU, I would be surprised if Greece did that. I suppose there could be some sort of quasi-Orthodox alliance with Russia, but, despite being Orthodox myself, I feel that would be a disaster for Greece.


 

Huw Watkins  Identity Verified
United Kingdom
Local time: 22:34
Member (2005)
Italian to English
+ ...
TOPIC STARTER
Great idea Jan 26, 2015

Laura Tridico wrote:

I've lived in the US, Belgium and now the UK over the past 8 years, and currency swings are nothing new. I've learned that I can "hedge"somewhat by having customers in both North America and Europe, setting rates in the different local currencies. When one goes up, another may go down, but things tend to balance out for the most part.

That said, I don't see the Euro gaining a lot of strength in the coming months (barring unforeseen developments, which can always happen).

Laura


Yes I think you are right. Looking to the Americas is a very good idea. I haven't really targeted those markets in the past and I think that this form of hedging is the way forward. Thanks for the input!


 

Sheila Wilson  Identity Verified
Spain
Local time: 22:34
Member (2007)
English
+ ...
The bigger problem Jan 26, 2015

Huw Watkins wrote:
Dropping out of the single currency is not the same thing as leaving the EU, I would be surprised if Greece did that.

If Greece (or another country) were to leave the EU, that could start the snowball rolling. Believe me, that would be a far bigger problem for all us citizens of the EU living outside our home country. In fact, as someone nearing retirement age who is looking forward to (albeit small) pensions from the UK, France and Spain, and who could never contemplate a return to the UK after 20 years away, the implications of a break-up are just so immense that I can't go there unless I have to. I'll just face up to in if/when I have to.

If everyone drops the euro, sure it will take a bit of adjusting to, but it won't be the end of the world. Does anyone here remember the vast problems that were expected when we (those of us who did) adopted the euro? I was in France at the time and the word was that the Frenchman in the street simply wouldn't adopt it; that they'd all be thinking in francs for the rest of their lives and converting with great difficulty. They said it would take decades to get the franc out of people's minds and even out of their pockets. Rubbish! People have short memories and if it's less trouble to adapt then they'll adapt - the French certainly did. Of course, there was an effect on inflation etc but the world survives things like that; they just give us something to moan about. Some people's businesses failed and they blamed it on the euro, while others just got down to making any necessary adjustments so they could continue to be successful.

My thoughts have been to potentially swap from billing in EUR to billing in GBP. What are people's impression of this approach?

I'd have thought it would make a lot of sense for you to invoice in GBP, not just from now but in the past, too. After all, pounds are what you have to spend. I do offer my UK-based clients the opportunity to pay in GBP, but then I have a GBP bank account and certain GBP expenses. Like everything in business: firstly, you have to do what's sensible for you, and then within that, to the extent that it's possible, you accommodate your client's wishes. Only when the majority of clients, and potential clients, want something other than what you're offering do their wishes become really, really important.


 

Huw Watkins  Identity Verified
United Kingdom
Local time: 22:34
Member (2005)
Italian to English
+ ...
TOPIC STARTER
Billing in GBP and pessimism about the EU Jan 26, 2015

Sheila Wilson wrote:
I'd have thought it would make a lot of sense for you to invoice in GBP, not just from now but in the past, too. After all, pounds are what you have to spend. I do offer my UK-based clients the opportunity to pay in GBP, but then I have a GBP bank account and certain GBP expenses. Like everything in business: firstly, you have to do what's sensible for you, and then within that, to the extent that it's possible, you accommodate your client's wishes. Only when the majority of clients, and potential clients, want something other than what you're offering do their wishes become really, really important.


Yes I invoice UK clients in GBP but they probably fall into the minority. I was thinking more about billing EU clients in GBP if they no longer have the Euro. As you say though, we translators will probably end up dancing more to their tune than the other way around.

As for your pessimism about countries leaving the EU, somehow that feels very unlikely. Britain has been threatening to do it in order to impose more draconian immigration laws, but it seems doubtful somehow.


 

Sheila Wilson  Identity Verified
Spain
Local time: 22:34
Member (2007)
English
+ ...
Clarification Jan 26, 2015

Huw Watkins wrote:
I invoice UK clients in GBP but they probably fall into the minority. I was thinking more about billing EU clients in GBP if they no longer have the Euro.

What I was meaning to say was that you would be justified, IMO, in invoicing ALL clients in GBP, UNLESS you're somehow convinced that receiving payment in their own currency (whatever it is) is the right thing for you and/or your business. Personally, I accept GBP and USD because I can usefully spend them without conversion, and I have places I can keep them without incurring additional fees. I wouldn't accept Australian dollars, or Swiss francs, or any other currency - those clients have to pay in EUR, although very occasionally I accept payment in USD or GBP from them.


 

Frankie JB
France
English to French
+ ...
Intelligence is a double-edged sword, use it not to worry but have a good life Jan 26, 2015

Hey Huw, what if dinosaurs reappear? And what if the Gulf Stream change direction? Omg omg omg... icon_biggrin.gif
Planning ahead is great but right now there are more chances that Germany leave the EU rather than Elladitsa... If you want to use your intelligence to worry, get ready for TAFTA instead!

[Edited at 2015-01-26 16:21 GMT]


 

Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 23:34
Member (2005)
English to Spanish
+ ...
No worries about Spain Jan 26, 2015

All I would like to say is that Spain's situation is not at all comparable to that of Greece. Please remember that Spain has not been rescued as Greece has been. Some of our banks have received liquidity funds which very many of them have paid back already. Spain does have a total debt of 90% of the yearly GDP, but it is far lower than that of Italy's, for instance (which I think reaches 135% of the GDP; please correct me if I am wrong here).

We have a stable economic situation which is gradually improving, with unemployment going down and good economic prospects ahead. Spanish people are well aware of the benefits we have experienced out of being members of the EU and being in the euro.

As a summary, Spain's prospects are good, I would say. You can count on Spain and the Spanish people as solid and trustworty partners in the EU.


 
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