Greece debt crisis: Olive oil supplies threatened as banking system grinds to a halt

Supplies of the precious commodity have been hit by dwindling confidence

Olive oil on display in an Athens supermarket. File photo (Getty Images)

It is a vital element of Greece’s agricultural economy, but now the flow of olive oil has begun to slow as farmers are refusing to part with their product unless their distributors pay them in cash.

Supplies of the precious commodity have been hit by dwindling confidence in Greek banks, as the country’s half a million olive growers – many of them small family businesses – fear the banks will raid their accounts, so are refusing to accept large payments via bank transfer.

“They want it in cash or they prefer to keep their olive oil in their tanks,” said Chris Dimizas, managing director of the extra virgin olive oil producer Greekpol in the Peloponnese. But his company does not have enough bank notes to keep paying the farmers even after it asked its own customers – supermarket chains, grocery shops and restaurants – to pay their invoices in cash, Mr Dimizas said.

Olive growers fear the banks will raid their accounts (Getty) (Getty Images)

“It worked for one week, but it won’t work for ever,” he said. “If we keep being unable to find a raw material supplier that can be paid through the banking system ... the deliveries will stop immediately.” Gaea, another olive oil supplier, is offering farmers cheques that they can cash once the banks reopen. “A single olive oil cargo costs about €100,000 (£71,000). We don’t have such sums in cash,” said its chief executive, Aris Kefalogiannis.

At least three companies in Greece including its biggest electronic appliances chain have begun paying staff in cash, after the country imposed limits on withdrawals from banks last week. The moves are further signs of the domestic impact of the financial crisis.

Millions of Greeks who had been promised they would have access to their bank accounts in full from the middle of this week were told that this would not, after all, happen. Banks will stay closed at least until next week, after officials admitted it was “technically impossible” for them to reopen. Cash withdrawals are limited to €60 a day.

Tuesday's newspapers dramatised the make-or-break nature of the Brussels showdown. “Time has run out for a solution before catastrophe,” was the headline in Ethnos.

But, in a sign of growing tensions, one of Greece’s most popular cartoonists has taken down his Facebook page after what appeared to be a concerted attack by pro-government cyber bullies. The cartoonist, Arkas, had drawn a newscaster saying: “I have complete trust in the government. It has its feet firmly planted in the clouds.” But his cartoon prompted an avalanche of hostile messages.

Reuters