World Credit Risk Guide – Greece, Cyprus and Turkey
A number of years ago, alas both Greece and Cyprus were caught up in the news, unfortunately for all off the wrong things to do with their country finances.
A couple of years on, and how are things looking. Well, the following provides a snapshot of both these Countries, and adds Turkey into that as well, being the furthest most Country under original Europe, before the break-up of the Former U.S.SR.
€240bn was the bailout package both together by the EU and the IMF, such was its crippling public debt. Many around the world knew what the global recession had turned out to be, but unfortunately Greece was on of those Countries which had become badly hit.
As of today, unemployment is at its highest, and the economy has shrunk to unbelievable levels whilst Greece sets about trying to understand what to do with its debt circumstances. But hopefully, the tide in its economic fortunes are beginning to show through via the austerity cuts.
Legal activity in the country isn’t recommended at this stage, given the details explained above. If you wish to proceed with either a well known brand name, and/or any other business within this Country, then it would be wise to factor in either a higher deposit or a medium deposit depending on how well known your Customers are.
After all, you may have a good relationship with them, but that is not to stop their own Customers not paying them off, hence causing a backlog in your Invoices in getting paid on time.
With this in mind, a high credit risk rating needs to be given to them, until such point the Greeks can salvage their debt circumstances to all Customers abroad in full.
Risk Rating = 5
Not far from the bottom of the risk pile for Europe is Cyprus. Like that of Greece, they have had a difficult period in conducting business. The majority of the Cypriot economy have been reliant on Greece, and when that Country had been hit by the banking crisis, it took Cyprus with it.
Like that of Greece, legal action in this country is not recommended and with that in mind a high credit risk rating is attributed to this.
Risk Rating = 5
Bordering onto some danger zone countries, and being the furthest most Country within Europe, nearing the Middle East, Turkey has had its fair share of troubles, notably as there was a tug of war with the State and its economy back in 2002, when the IMF bailed them out.
However, it was fit to weather the hit that the global economic recession bought about at that time. In terms of issuing legal proceedings in this Country, jurisdiction clauses for legal contracts are likely to be questioned, and in my experience it is best to avoid taking legal action in this country, as their synopsis needs to be fulfilled by having contracts stamped and signed, as opposed to just having a signature (given the barriers in modern democratic legal constitutions favoured by Westerners.).
With this in mind, it fares slightly better in the Credit Risk Ratings.
Risk Rating = 4