What contingency plans can you make for the possible impacts of a Greek default?

Published: Thursday, 18 June 2015 11:15

The impacts of a Greek default could be felt across Europe and could generate real business continuity risks. David Honour offers a checklist of questions which organizations can consider when making contingency plans.

While on the surface a Greek default on its IMF debt repayment, due by 30th June, may look like a pure political risk; in reality it could generate real business continuity risks for European businesses. The impacts to Greece-based organizations will, of course, be much greater; but all European companies have potential exposure due to two main areas: supply chain dependencies; and the wider societal impacts of a default.

The conundrum for European business is what contingency plans can be put in place to protect against the possible impacts? The following sets of questions offer some food for thought:

Greece-based organizations

It has been suggested by various experts that a Greek default may result in an immediate closure of banking facilities in the country, to prevent a panic-driven run on the banks. This would have rapid knock-on impacts, with businesses being unable to process non-cash payments and to access funds.

Organizations need to consider the following:

Non-Greece based organizations

The main exposure for Non-Greece based organizations comes from the supply chain but there is a risk that anti-EU and anti-capitalist feeling will be fuelled by the pressure that has been put on Greece and the impacts on ordinary Greek citizens, and pensioners in particular, since calls to reduce pension rights has been one of the central sticking points in discussions. This could result in widespread protests. Another exposure that non-Greece based organizations have is employees who could become stranded in the country should air and ferry networks close due to lack of funds, critical infrastructure problems or fuel shortages.
Organizations need to consider the following:

The above is just a quick brainstorm of questions that could be asked. If your organization has contingency plans you are willing to share, or if you have more questions to add to the above lists, please email editor@continuitycentral.com so that they can be added to this page.

The author

This article is by David Honour, the editor of Continuity Central.