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Current affairs: Greek companies defaulting on their payments
Thread poster: Roman Lutz

Roman Lutz  Identity Verified
Germany
Local time: 13:04
English to German
+ ...
Jul 8, 2015

I currently have two major clients based in Greece. One of them (an agency) has been a regular client since October last year, and even though the payment was sometimes late by a couple of days (the usual end of the month + 60 day payment terms), the money was always credited to my account in full eventually.

Now with the crisis heating up, quod erat demonstrandum, the last payment, which was due late June, has not (yet) arrived. Now I know this was bound to happen, what with the banks in Greece being closed and money transfers being blocked by the authorities;

BUT: I tried contacting their accounting department, addressing the delay; so far no reply. Meanwhile, the agency's project managers have been sending me an abundance of translation projects, all of which I executed promptly and competently (I would like to believe, at least), even though I am not sure when and if I will be paid for my work in the future.

I am now at a loss as to when I should stop completing projects for this particular client; like I said, they have never defaulted on their payments so far and they are one of my most regular and, except for this particular issue, favorite clients.

Is it a good idea to address this issue with the project managers, who are still counting on me ("I would like to continue working for you, but in view of the current situation, I would like to put our co-operation on hold" or something to that effect), or should I just keep working for them without addressing the issue at all (at least for a while)? Should I be radical and stop working for them immediately?

I know a week is not much, but so far that has never happened with that client, and given the current situation, it is evident that there is a correlation. I would really like to keep this client, but quite frankly, I am neither willing nor able to work for free.

Anyone who would like to share their thoughts?


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Jean Lachaud  Identity Verified
United States
Local time: 07:04
English to French
+ ...
Why would you work without expecting to be paid?? Jul 8, 2015

I would certainly ask the PMs along the lines of: "I haven't been paid, your Accounts payable Dept. is not answering, surely you will understand that in view of the situation I need to be reassured."

Recent statement by the Greek Minister-of-Finances-of-the-week to the effect that "richer countries should pay" is not exactly reassuring.


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Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
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Jul 8, 2015



[Edited at 2015-07-08 21:25 GMT]


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Kevin Fulton  Identity Verified
United States
Local time: 07:04
German to English
Finish current projects only Jul 8, 2015

You've committed to the projects you've received, so for reasons of integrity, you should complete them, even at the risk of not being paid for a long time. But I would not take any more until the situation is clarified. It's not the agency's fault that their country's economy is in the toilet, but until they figure out a way to receive payments from their customers and pay their translators – and employees, you'll need to implement risk management procedures.

It's a terrible situation, but in this case, you have to protect your own interests.


[Edited at 2015-07-08 20:14 GMT]


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Wilsonn Perez Reyes  Identity Verified
El Salvador
Local time: 05:04
Member (2007)
English to Spanish
+ ...
Don't think any site rule is being violated Jul 8, 2015

Saying that you are fearful of not being paid because of the current political-financial situation in Greece is not a controversial opinion.

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Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
The situation is unpredictable Jul 8, 2015

To the very best of my knowledge, having followed the Greek crisis closely, it is unpredictable how it is going to end, and who is going to be paid, and who is not. That there is a major risk of sovereign default and Grexit can be objectively stated without becoming political.

No matter how much a Greek client wants to pay, the company is prevented from doing so, unless it had the foresight to move funds out of Greece before the banks closed. There is no way of telling when these restrictions will be lifted, and to which extent.

I have no Greek clients, and I would not accept a new one without prepayment under these conditions.

It is more delicate in the situation Roman describes. Even if it is a very good client, there is a significant risk of never getting paid now, or of being paid at an unpredictable future date. There is also a risk of being paid in a new, Greek, devalued currency instead of euros, something that could happen if in connection with a Grexit the government decrees that all foreign debts are converted to a new Greek currency.

I tend to believe I would stop further work until I was paid in Roman's situation.


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Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
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Jul 8, 2015



[Edited at 2015-07-08 21:25 GMT]


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Dan Lucas  Identity Verified
United Kingdom
Local time: 12:04
Member (2014)
Japanese to English
It's not really in your client's hands any more Jul 8, 2015

Roman Lutz wrote:
Anyone who would like to share their thoughts?

This is not about a single agency. Unless it has squirrelled away some money outside Greece, the client is going to be unable to take money out of its bank to pay you. How can it, when bank accounts are frozen?

If the client has money outside Greece, you may get paid. If not, I would say the probability of getting paid at all, at least in the short term, is small. And if Greece leaves the Euro and reintroduces the drachma, what happens to your invoices then?

To be brutally honest, this should not have come as a surprise. Greece's financial problems and the potential for a run on the banks have been discussed for years. The European media has been focusing on very little else for the past several months.

These are not normal times in Greece, so normal approaches are no longer valid. Greece is in the middle of a banking crisis. The issue isn't a bad client, the issue is capital controls.

In this kind of situation the rules no longer apply and previously unthinkable things can happen. For example, in Cyprus during their financial crisis the government simply declared a tax on wealthy individuals and literally took funds from people's bank accounts.

What can your client do if the Greek government decides to do the same and just deducts money from your client's bank account?

I know it's a good client, but the risk-return tradeoff is horribly skewed towards risk. I advise you - and everybody else - not to accept any work from any Greek company without advance payment.

Regards
Dan


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Jenn Mercer  Identity Verified
United States
Local time: 07:04
Member (2009)
French to English
Note from the Mod Jul 8, 2015

The original poster framed his question very much in line with the subject of this forum. There is certainly a potential here to descend into political waters, but the question of what to do when a client may be unable to pay due to circumstances beyond their control is a fair one. Try to keep to the specific question without delving into global politics.

In the meantime, please refrain from speculating in the forums on what the Mods will or will not allow. If you are concerned that a particular post may be out of line, you can use the "Call to this topic" button on the bottom of each page to call one or more Moderators to a topic.


Your Friendly Moderator,

Jenn Mercer


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Sheila Wilson  Identity Verified
Spain
Local time: 12:04
Member (2007)
English
+ ...
No dialogue = no deal Jul 8, 2015

It may not currently be in the client's hands to pay - the reality of the situation is clear to see - but the client CAN reply to emails and maintain a dialogue.

I've had a couple of clients in the Middle East whose payments have been blocked by EU and US sanctions and been several months late. In both cases there was continued dialogue and continued collaboration (within reason).

But without dialogue, surely there can be no further supply of services, can there? You'd be recklessly throwing good money after bad. That doesn't come within the bounds of acceptable business risk. Where there's a will, there's (eventually) a solution; but maybe your client thinks the current siuation is an excuse not to pay.


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Samuel Murray  Identity Verified
Netherlands
Local time: 13:04
Member (2006)
English to Afrikaans
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Are Greek bank accounts really frozen? Jul 8, 2015

Dan Lucas wrote:
How can it, when bank accounts are frozen?


Do you have a URL for that?

I could not find confirmation on the web that Greek bank accounts are frozen. I know they can't withdraw [much] cash, but this is the first I've heard about their accounts being "frozen". The closest that I could come to anything like that is this, which states that different banks treat non-Greece debit and credit card transactions differently.


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Dan Lucas  Identity Verified
United Kingdom
Local time: 12:04
Member (2014)
Japanese to English
No overseas transfers Jul 8, 2015

Samuel Murray wrote:
Do you have a URL for that?

Account holders are not allowed to transfer money abroad. This has been widely reported. Try this Economist article for a start and google 'greece capital controls' for many others.

Thus, while small amounts of cash can still be withdrawn from banks and ATMs within Greece, international payments - i.e. those that would be used to remunerate the starter of this thread - are effectively frozen.

Regards
Dan


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Roman Lutz  Identity Verified
Germany
Local time: 13:04
English to German
+ ...
TOPIC STARTER
Thank you for your input Jul 9, 2015

Thanks everyone for your input. I now feel more confident in what I was planning to do originally - confront the PMs with the issue. Your more or less unanimous anwer makes me feel I have been too gullible and naive.

It is one thing if money transfers abroad are frozen, but it is an entirely different story if their accounting department simply doesn't reply - this somewhat pokes a hole in my trust and makes me wonder if they want to draw the whole thing out and get as many projects done as possible before the whole things collapses.

/EDT: I would still love to hear from someone who may be in the same situation, i.e. who has been working for Greek clients. So if anyone that applies to reads this, I am encouraging you to share your views.

/EDT2: I just received a message from their accounting (after I had sent two additional emails), saying that they settled all invoices from a separate bank account outside Greece, but German and British banks rejected the payment (??? Why would they do that ???). I will keep you posted how this plays out.



[Edited at 2015-07-09 06:34 GMT]

[Edited at 2015-07-09 08:32 GMT]


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Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
Interesting Jul 9, 2015

Roman Lutz wrote:
they settled all invoices from a separate bank account outside Greece, but German and British banks rejected the payment (??? Why would they do that ???).


Extremely interesting. Are they willing to provide evidence of that (with all private information blurred)? I have seen nothing about such a restriction in the press, but then again I don't know how the euro works under the covers.

I seem to remember a transfer from a euro account in a Danish bank to a krone account (local currency) in Denmark. Even though the accounts were both in Denmark, something like 'foreign transfer' appeared somewhere, either because the euro was foreign currency or because I lived outside Denmark.

So is it possible that euro accounts in eurozone or EU banks, held by customers resident in Greece, are treated as if they were Greek accounts? I always thought that if a country should end up crashing out of the euro, then it would be fairly easy to identify all accounts held by Greek residents and redenominate them into that country's new currency, so that it would have made no difference for these account holders to have moved funds elsewhere in the EU. Maybe one needs to move money out of the EU to keep it safe.

The euro is a doomed currency in any case and will never work without political union (which is not going to happen any time soon). That has nothing to do with Greece but with a faulty design of the euro. Experts warned about this already 20 years ago (example: "The Rotten Heart of Europe" by Bernard Connolly, former head of the European Commission's monetary unit; sacked when he published that book in 1995, book that predicted all the problems), but because the euro is a political project not based on sound economics, nobody listened. It would be a mistake to think that if only Greece leaves, then the euro will be fine. It won't. I wouldn't keep money of importance in euro anywhere, as the whole thing will blow up one day, and Greece is just the beginning. I stress that these statements are economic, not political.


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Balasubramaniam L.  Identity Verified
India
Local time: 16:34
English to Hindi
+ ...
It is really sad what is happening in Greece Jul 9, 2015

But as mentioned here by others, we also have to protect our interests. I am in a remotely similar position as I have several clients (agencies) in Portugal and Spain and I am keeping my fingers crossed that Greece won't have a domino effect and the EU won't start to unravel. If that happens, the next to be affected would be Portugal and Spain, and I am a bit worried on that account. I have already taken steps to diversify and reduce my dependence on these clients.

Would it help to speak to someone higher up in the agency than PMs and ask them directly what they anticipate the situation is likely to be and whether they would be able honour payment commitments? From what you mention in your post, the client appears to be above board and is faced with a situation beyond his control. He might share his honest opinion and even tip you as to what you should do. Even otherwise, by talking to him, and framing your questions judiciously, and by listening more than yourself talking, you can get many insider perceptions about how the situation may pan out.

[Edited at 2015-07-09 12:12 GMT]


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