U.S. Companies Are Pulling Money Out Of Europe In Fear Of The Euro Collapsing
New York City -
At nearly ever major corporation with operation in multiple countries, a recent poll by Fireapps found that as much as 88% are actively preparing plan in case the Euro collapses, as many fear its possibility. Fireapps consults for many of the Fortune 500 companies in the United States.
Among the most common plans are moving money every day out of European markets and into other more stable centers. The constant movement of large funds are futher putting Europe one step closer to a financial implosion.
"Almost all companies have a committee in some shape or form to prepare to deal with the euro crisis," said Martin Donovan, deputy policy and technical director of the London-based Association of Corporate Treasurers, which advises corporate finance departments.
"The larger companies have been thinking about this for a long time. And it's really gone beyond just a pure housekeeping exercise," Donovan said.
Making matters worse, most companies are now reporting they are going to substantially slow or stop hiring until they know more about what is going to happen in Europe, and that puts a damper on the U.S. recovery efforts which require more jobs and more people returning to work.
These corporations are for now doing something called "sweeping", where, at the end of the day, they withdraw money from their bank accounts in the various nations they operate in inside European countries, then the following morning they redeposit the money back into those same banks they withdrew from. It is hoped that by moving their money daily into more stable financial centers, they limit the risk of their money being stuck in a collapse.