Greek tragedy postponed.

The latest “deal” to avoid a default by Greece has been done or as cynics might say “cobbled together”.Essentially Greece will get loans of more than
130bn Euros (£110bn, US$170bn) and have about 107bn Euros of its debt written
off.A substantial haircut for lenders in the private sector who face taking
losses of 53.5% on the value of their bonds, with the real loss as much as 70%.

In many ways the Greek crisis is a metaphor for our times. A customer develops a pattern of late payments but far from being called to order the supplier fearful of alienating the customer allows this to become the norm.

When the inevitable tipping point is reached there is no alternative to continue to support the errant buyer or risk realise a loss.

There is a real concern that the problem is just being kicked down the road.

Fortunately in the UK there is not the exposure to the Greek situation that other EU nations are carrying.
However as the international banking community prepares for another serious blow to its capital structure the UK banking community will not be immune. At the very least there will be a renewed focus on exposure and this will impact on their willingness to lend.

Now more than ever businesses must demonstrate that they have fill control over all aspects of their operations. Reporting procedures must be strictly observed and
any potential problem areas or customers brought quickly into line. As it
becomes harder to borrow, positive cash-flow is critical.