How Merrill Lynch 'plans to send trucks full of cash into Greece' as U.S. firms plan for country's exit from the euro
- Greece is on brink of financial collapse and is expected to leave Euro
- American banks with clients in the country are now preparing contingency plans for how to get money to employees if the country's banks close
Bank of America Merrill Lynch is poised to send trucks filled with cash into Greece as part of plans being adopted by U.S. firms in the event of the country crashing out of the euro.
With Greece teetering on the brink of a chaotic exit from the Eurozone, American banks and consulting firms have drawn up contingency plans for the financial turbulence that would follow.
Merrill Lynch is one of the firms preparing to bring in large amounts of the drachma, Greece's former currency which is expected to be used if they leave the Euro, in order to pay employees in case the banks shut during the transition and access to cash is hard to come by.
Ongoing issue: The financial crisis in Greece has often turned into protests, like the one these police are preparing for here in 2010, but now it is more of a concern of how to facilitate a transition out of the Euro
Going back: Long considered the last resort, financial analysts feel the country will revert back to its former currency called the Drachma, and now it is only a matter of when the switch will happen
Following fifteen months of increasingly dramatic negotiations, the debt crisis has reached the point where financial analysts aren't talking about if but when it will happen.
The New York Times spoke to experts who expect that such a grave decision would be announced after the close of business on a Friday after markets are finished for the weekend.
Then, if the country were to revert from the Euro, the currency which it has used since 2001, then it will require an extra bank holiday on Monday to organize and distribute the new currency.
Reuters asserts that without further aid, Greece will be staring at certain bankruptcy and a return to the drachma.
Ford, the American car company, has already programmed their computers within the country so that they are able to handle transactions in terms of drachma instead of euros, showing how imminent they expect the change to be.
In such a situation, it would be nearly impossible for banks to rapidly hand out cash to consumers, leading the way for more confusion.
'Companies are asking some very granular questions, like "If a news release comes out on a Friday night announcing that Greece has pulled out of the euro, what do we do?"
'In some cases, companies have contingency plans in place, such as having someone take a train to Athens with 50,000 euros to pay employees,' Peter Frank of PricewaterhouseCoopers told The Times.
Old is new again: The country is expected to switch from the Euro (right) which they have used since 2001 to their former currency called Drachma (left)
Contingency plans: Banks are discussing driving trucks full of cash into Greece to help facilitate the transition if it were to happen, though the exact model of car is unknown. Protestors shown here in 2008 attacked this bank transfer armored truck
The fact that such drastic action is on the brink of becoming the solution was not expected by many inside Greece, though foreign advisers have been continually critical of the common Euro currency for the entirety of the crisis.
'When we started giving advice, they came for the free sandwiches and chocolate cookies,' Bank of America Merrill Lynch head of Europe Carole Berndt said jokingly the paper.
'Now that has changed, and contingency planning is focused on three primary scenarios — a single-country exit, a multi-country exit and a breakup of the euro zone in its entirety.'
If Greece were to leave the Eurozone, Spain and Italy would be the next focus of the financial world as their own debt troubles could be alleviated to a degree by also reverting to their own currencies.
Merrill Lynch is not alone in preparing for further tremors within the European economic community.
Visa and Mastercard both said that they have back-up plans and protocols in place so that they will be prepared if other countries also decide to leave the common currency.
A spokesman for Merrill Lynch said 'Bank of America Merrill Lynch has no current plan to send cash to Greece beyond our normal course of business. We are working closely as a priority with our many clients to ensure that they are fully prepared for all possible outcomes regarding the current issues affecting the eurozone.'