Israeli Exporters Worry as Greece Implodes

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Members of left wing parties shout slogans behind a burning EU flag during an anti-EU protest in Thessaloniki, June 28, 2015.Credit: AP

The collapse of the Greek economy, as the country orders banks to be shut and imposes capital controls as of Monday, will have reactively little direct impact on Israel. But exporters are worried that the euro will depreciate sharply, hurting Israeli export competitiveness across the 19-member euro bloc.

“Our main fear is the impact of the crisis on the euro rate. If the euro weakens against the dollar, that’s a problem in itself,” said Amir Porat of Edom Fruits, an agricultural products exporter. “The euro is already a few percentage points weaker than it was a year ago.”

He said the fruit-export season gets underway in August and peaks in September in Europe. That will give exporters enough time to see which direction the euro goes in the wake of the Greek crisis, although it offers them little help in terms of exports competitiveness.

The euro gained on the shekel Friday, the last day of forex trading, strengthening nearly 0.65% to 4.2508 shekels. But the European currency has depreciated 2.3% just in the last week as the Greek crisis grew, and is down 12.5% in the past four months.

Overall, Israeli exports to Greece are small, although they grew sharply last year despite the depressed Greek economy. All told, sales to Greece reached $448 million in 2014, ranking Greece No. 25 among Israeli export markets, according to the Israel Export Institute.

Still, exports increased 77% in 2014 from the year before. Moreover, in the first five months of this year, even as Greece has been roiled by debt talks with its creditors, Israeli exports fell just 4% from the same time in 2014, to $257 million.

Imports from Greece also rose, albeit a more modest 14% to $229 million last year, making the country the 31st-largest source of Israeli imports. They fell 4% in the first five months to $87 million.

But one Israeli industry is more exposed to Greece’s economic woes than the rest of Israel’s economy: The chemicals industry exported $293 million in merchandise to Greece last year, two thirds the total and a 170% increase from 2013.

The single biggest importers are Haifa-based Oil Refineries Limited, Haifa Chemicals and Adama, the agrochemicals maker formerly known as Makhteshim Agan.

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