By Lefteris Karagiannopoulos
ATHENS (Reuters) - With banks shut and the economy seizing up, some Greek newspapers like the Empros daily on the island of Lesvos are running out of paper and could be forced to stop sales altogether until the banks open again.
The island's biggest selling newssheet, Empros has already reduced the number of pages to 16 from 20 and its chief executive Manolis Manolas hopes he won't have to make further cuts as the country's cash crunch worsens. Greek banks have been shut for almost two weeks after capital controls were imposed.
"There is a definite problem with paper supply," Manolas told Reuters by phone. "Our supplier can't provide us with it, as it is stuck in customs. He can't pay the foreign suppliers, as bank transfers are blocked and there's very little cash to continue operations".
Curbs on money withdrawals and transfers have made life miserable for millions of Greeks, whose government was scrambling on Thursday to devise a new set of proposals for a bailout with its creditors to stave off imminent bankruptcy.
As well as reporting on the capital controls introduced at the end of June - queues outside banks and cash machines are now a daily sight in Greece - the media also became a victim of them.
The country's top-selling newspaper Ta Nea wrote in an editorial on July 1:
"The newspaper you hold in your hands numbers only 32 pages because the stock of printing paper will last for just a few days and it will not be possible to get a fresh supply through customs because of the bank holiday."
Another newspaper on Lesvos, The News of Lesvos, is worried its stock of paper could run out soon because it can't get its hands on enough paper supply, publisher Stelios Staikos said.
The capital controls have particularly squeezed privately-owned, small-circulation newspapers sold in more remote areas of Greece, a government official told Reuters.
Such newspapers benefit from tax breaks and government advertising. The paper shortage prompted the government to issue a statement on Thursday assuring media businesses that such privileges would not be withdrawn even if some newspapers had to shut down temporarily until the capital controls were lifted.
"We actually want to inform them that we understand the supply problems that they might have in terms of paper, as all paper is imported and they might not be able to pay," an official at the government's Secretariat General of Information and Communication told Reuters.
"So we reassure them that we will not strip them of these privileges if they don't circulate from June 28th up until 15 days after the banks reopen," said the official, who did not want to be quoted by name.
Manolas, whose orange-and-green newspaper was founded in 1974 and prides itself on a series of scoops on the lending practices of a local lender that later went bankrupt, was not aware of the government announcement.
But it cheered him up.
"What, they said that? Gosh that's some good news for a change!"
(Writing by Matthias Williams; editing by Janet McBride)