Across Bulgaria border, fear and gloating over Greek crisis

SANDANSKI, Bulgaria: Greece’s debt crisis is lapping over the border into this southwestern corner of Bulgaria, where the owner of the Felipe Z textile factory worries she may not be able to pay her 60 workers next week.

Factory owner Snejana Zachariou explains buyers of her goods are exclusively Greek. She will sit down with one of them on Monday to try to work out how she can receive payment for a pile of orders if Greek banks remain shut and capital controls stay in place.

Her plight is an example of how vulnerable the former Communist countries in central and eastern Europe that neighbour Greece are to the crisis. The pain could worsen if Greeks reject international creditors’ demands in a referendum tomorrow.

“I do not know whether I can manage, whether there will be money, because this business is no longer very profitable to allow us to build up cash reserves,” said Zachariou, whose husband is a Greek boat captain. “Maybe we will survive for one month to pay something but after that, if money does not come it will be very difficult.” “And that is why I worry now very much for my people, because they have families, they have loans to the banks. If they cannot pay their loans, they will have problems too.”

Countries like Bulgaria, Romania and Macedonia are particularly exposed to the fallout of the crisis as several of their banks are Greek-owned and economic ties are close.

Greece is the third-largest investor in Bulgaria and is also Bulgaria’s fourth-largest export destination. While their fate is tied to Greece, Zachariou said her workers are divided on what to make of it all. Some feel pity for the Greeks while others say it is time for their neighbours - who despite years of austerity are still much better off than they are - to start living within their means.

Sales of the company, which sews women’s jackets and dresses, are about 40,000 levs (20,454 euros) to 50,000 levs a month. The crisis has started eating into revenues. Zachariou said a jacket that her firm once made for Greek buyers for 9 euros ($10) only fetches 6 euros now.

“I listen to the women here, because I spend my time between work and home and I do not have time for contact with other people,” Zachariou said. “But they have different opinions. Some are speaking with compassion for the people who are going through difficult times. Others say: ‘Until now they sang and danced’ without knowing what was coming to them.”—Reuters