Giorgos Kourasis knows exactly how many people have walked through the door of his tavern since Monday, because he has had nothing to do but wait and count.  “The number,” he says in full knowledge of the ironic punch he is about to pull, “is zero. Absolutely no one has come and sat at a table for the first time in the 80 years that we’ve had our family business. “  Less than 72 hours have elapsed since banks were closed and capital controls imposed on Greece, but the effect has been devastating.  An economy, already labouring under an unprecedented liquidity squeeze, has come to a juddering halt.  Shops have closed, factories have stopped operating and firms have told employees to take enforced leave until the country holds a referendum on July 5 over the terms of further financial assistance from international creditors. Many larger companies have refused to pay staff altogether.  “Consumption has dropped by 70%,” said Vassilis Korkidis, who heads the National Confederation of Hellenic commerce. “No one trusts anyone anymore, so no transactions are taking place between wholesale and retail,” he said.  The confederation, which represents some 280,000 small and medium-sized businesses, has been badly hit by capital controls. More than half of Greece’s food and raw materials are imported, but without a functioning banking system there was no way to wire money abroad and pay for supplies, said Korkidis.  “Multinationals can, but local companies can’t,” he sighed. “Shortages are manageable this week because traders have stock, but next week that won’t be the case. We are experiencing things we never thought we’d see.”  The cap on cash withdrawals of €60 a day has attributed to the precipitous drop in consumption. And amid fears of it only being a matter of time before banks completely run out of notes and coins , there is mounting speculation that the limit may be reduced to a paltry €20.  “People are very worried about spending anything because they don’t know what they will wake up to tomorrow,” said Kourasis, who will have to lay off staff to make ends meet. “We’re a family business so we can afford to stay open, but I’ve heard of dozens of stores deciding not to open because they just can’t afford running costs.”  The signs of mega economic gridlock were evident all over Athens on Wednesday – and not only in the form of closed shops, empty restaurants and queues outside cash dispensers. Ferry boats sailing from the city’s port of Pireaus were bereft of passengers. Public transport was noticeably thinner, the result of fuel reserves running low, while supermarkets were showing signs of panic buying, with food staples at an all-time low.  The newspaper Ta Nea – apologising for appearing much thinner itself – declared “the country is diminishing.”  “The newspaper that you hold in your hands is only 32 pages because there are only enough reserves of paper left for a few days,” it wrote in an editorial. “And there is no possibility to buy new amounts because of the enforced closure of banks.”  The new downturn came on top of official data showing Greek manufacturing activity shrank for the 10th month in a row during June. The last three months were the worst quarter for manufacturing for two years.  At what is almost the height of the tourist season, hotels are also feeling the heat with a reported 40% drop in airline and tour operator bookings.  Athens’ failure to meet a debt repayment of €1.6bn to the IMF on Tuesday has resulted in mass cancellations of bank transactions by US travel companies.  “American tour operators were ready to make wire transfers,” said Ioannis Retzos, president of the Panhellenic Federation of Hoteliers. “But they couldn’t when US authorities warned them that money transactions to Greek banks would be impounded.”  If voters reject proposed reforms as the radical left prime minister Alexis Tsipras has urged them to do, telling the nation on Wednesday that it will strengthen Athens’ hand in negotiations with the EU and IMF, there are fears that plans to open banks next Tuesday will be revoked.  Reserves at the Bank of Greece, estimated at €1.6bn last Friday, are being depleted fast. “Even if there was an agreement today, it would take two to three weeks for banks to get back on their feet,” said Korkidis.  “And cash is running out very quickly. By Monday there is a very strong chance that ATMs won’t be dispensing any at all.”
Consumption apparently down 70%, tourism drying up and companies struggle to pay for wholesale food ahead of 5 July referendum