By COSTAS KANTOURIS and DEREK GATOPOULOS
Associated Press

THESSALONIKI, Greece (AP) _ Panagiotis Papadopoulos, the owner of a Greek company that builds and exports glass products like shower cabins, has been waiting three weeks to pay a supplier in Bulgaria.

It’s not that he doesn’t have the 45,000 euros ($49,000) or doesn’t want to pay. It’s that he first needs the approval of a committee run by the finance ministry in Athens.

Any business that wants to pay a foreign supplier needs this approval because the government is worried about money flowing out of the country due to its financial crisis. The process has created an administrative bottleneck that is causing huge pain for Greek companies already struggling through recession.

“They are dealing with a huge volume of requests,” Papadopoulos said of the committee, during a visit Friday to his factory outside the northern city of Thessaloniki.

Greece’s restrictions on money transfers and withdrawals have cut the amount of business done by small and medium sized firms by about half, with three in 10 businesses suffering a drop of more than 70 percent, according to a survey published this week by the national trading association GSEVEE.

Papadopoulos is no stranger to tough times. He survived six years of recession, during which one in every four businesses around the country _ about 200,000 _ collapsed. He’s had to lay off almost half of his 60 workers.

On June 28 this year, his job got even harder: Banks closed for three weeks and indefinite restrictions on cash transactions were imposed to prevent banks from failing. While the banks have since reopened, the government has kept controls on business payments abroad.

Papadopoulos says he was lucky to have received a large supply order just before the banks closed.

“But if this continues, I’ll have problems. I’ll have to turn to the Greek market for supplies, but it doesn’t provide all the materials I use.” Papadopoulos heads the chamber of commerce in Thessaloniki and was due to meet later Friday with finance ministry officials to request that restrictions be relaxed.

The problem appears particularly acute in northern Greece, where thousands of firms have applied to move to neighboring Bulgaria to avoid the problem and benefit from much lower tax rates.

More than 2,500 businesses moved to Bulgaria in the last two years, according to the national traders’ association. Now, about 60,000 more businesses have filed applications to set up in Bulgaria, though that figure includes firms looking to create subsidiaries.

Months of uncertainty surrounding Greece’s new bailout deal, the banking restrictions and a new round of government budget savings have pushed Greece back into recession _ but the extent of the downturn will largely depend on how quickly business can return to normal.

In central Athens, Katherina Athanasopoulou said orders from Germany for chairs from her family-run workshop had been canceled out of concern that the deliveries might not get through.

“There are days when we don’t even make 5 euros,” she says as she painstakingly weaves a rush seat.

“There is no way we will survive if this continues. We have rent to pay, taxes, one thing on top of another. We can’t make ends meet.”

There were some signs of hope before the banking restrictions kicked in: unemployment fell in May to 25 percent from 27 the previous year, and non-oil exports rose 18 percent on the year in June, according to figures announced Friday by the Greek Statistical Authority.

This data, however, does not include the period when banks were shut or when restrictions were placed on payments outside Greece, notes Christina Sakellaridis, head of the Panhellenic Exporters Association.

The chaos surrounding businesses has prompted economists to slash their forecasts for the Greek economy from mild growth to a punishing contraction of between 2 percent and 4 percent.

“Capital controls need to be relaxed,” said Sakellaridis, “And approval for payments made abroad need to be speeded up.”