Will brexit lead to grexit or will it strengthen tsipras’ position??

Will brexit lead to grexit or strengthen tsipras' position?

Alexis tsipras on saturday at the meeting of the central committee of SYRIZA. Image: W. Aswestopoulos

The athens view on brexit

It is almost impossible to discuss brexit in greece without talking about grexit in the same breath. At the same time, many greeks find it interesting that yanis varoufakis, of all people, the former finance minister, was one of the most energetic supporters of a bremain. Exactly one year ago, on 25. The greek parliament had decided on the hellenic referendum on june 6, 2015, to decide whether to continue or reject the austerity measures demanded by the lenders.

The result is known. More than sixty-two percent of greeks opted to vote on 5. July against austerity and tsipras implemented the exact opposite less than a week later. It is understandable that in the discussions on social networks jokes circulated that david cameron should have called alexis tsipras before his resignation. The latter had certainly told him how to skilfully circumvent an ultimately unwanted result of a referendum. However, there were also voices like that of dora bakoyiannis. The former eaves minister and mayor of athens took the brexit result as an opportunity to philosophize about referendums in general.

Tsipras himself made brexit his main topic at the meeting of SYRIZA’s central committee over the weekend. He did not spare reproaches against those responsible in brussel. "If we want to attribute responsibility for this development to someone, it must be assigned to the european leaders who, instead of discussing in depth the reasons and causes of the crisis, have created the ideological caricatures of the ‘industrious north’ and the ‘lazy south’", was a characteristic paragraph of his speech. Tsipras stressed. He also addressed the refugee crisis and the lack of european solidarity in this regard.

In typical greek style, tsipras also explained that he had warned cameron:

I remember the debate at the summit when it was finally decided, despite our differences, to grant special status to great britain. I had taken the floor and said to the british prime minister: I wish you with this decision, which was taken out of necessity, without full consensus of all, to win this referendum. But I’m not sure I would do it if you lured your people with less europe and said they had managed to gain special status with less europe-ing. Then it is very difficult to reverse the tide, because in the dilemma of less europe or no europe, when throughout the previous period the need was propagated to have rather less europe than no europe at all, the final choice will be an original choice and not a half-hearted choice. And so it happened.

Alexis tsipras

Does brexit lead to grexit or does it strengthen tsipras' position?

head of government and SYRIZA party leader tsipras at the central committee meeting . Image: W. Aswestopoulos

As for tsipras’s "original election" option mentioned by tsipras, the prime minister did not leave his audience in the dark. Tsipras fears a rise of right-wing extremism in europe and urges a departure from current policies under a left-wing, progressive banner.

Referring to his own referendum last year, the greek prime minister explained that the ie at the time was not a grexit, but rather a decision on austerity measures. He defended his further actions and the signing of the third austerity memorandum since 2010, arguing that things would have been worse under previous governments.

He was able to make his opening speech to the central committee, scheduled for 9:30 a.M., only after a considerable delay. Tsipras had a long telephone conversation with french president francois hollande in the early hours of saturday morning.

will brexit lead to grexit or will it strengthen tsipras' position?

Exchange office in athens. Image: W. Aswestopoulos

The consequences that can be felt in greece

Among the first tangible consequences of the brexit referendum are the problems that tourists from the united kingdom are now facing. Especially on islands, it is difficult for them to get cash. Bureaux de change refuse to accept banknotes because of the fluctuating rate of the english pound. According to reports, there have also been problems at atms. In athens itself, nothing similar could be observed, although the tourists at the exchange offices seemed a bit nervous.

Among the direct consequences for the greek economy pay:

  1. The rise in the cost of exports: the euro, which is used as currency in greece, is currently being significantly revalued against the pound. Thus, a reduction in greek exports is to be expected.
  2. The role of the greeks in great britain: especially during the crisis, the island was an el dorado for many young greeks willing to emigrate. They benefited from the EU freedoms and now fear for their future work permits. In addition, many of the richer greeks have chosen the island for real estate investments. They are now facing a change in their taxation. The english and scottish universities were also popular with greek students from the so-called better families. Finally, as EU citizens, they had to pay the lower tuition fees applicable to locals. The cost of studying will increase significantly after the united kingdom leaves the EU.
  3. The long-suffering greek banking sector: greek banks are involved in the UK banking sector to the tune of 41.76 billion euros, a quarter of greece’s GDP. This concerns deposits of greek banks in the british nostro vostro accounts, but also shares and debt securities. The longer the crisis surrounding the pound lasts, the more the greek banks, which have already been recapitalized several times, come under note.
  4. Tourism: for the current season, tourism operators expect little impact and only a foreseeable number of cancellations. However, there are fears that the annual number of 2.5 million british tourists will not be maintained in the coming years. This year the season had even begun with an increase in visitors from the island.
  5. The shipowners: london greeks they are called, the countless greek shipowners who run their companies from london and the other english cities. They are already being swarmed by malta, cyprus, the netherlands, dubai and also by their homeland. After all, 49.96 percent of the entire european fleet is in the hands of greek shipowners. In great britain, brexit or no brexit, they had to reckon with higher taxation from 2017 anyway. Whether the greek government succeeds in steering shipowners back home depends primarily on how much the EU insists on higher taxation and how quickly capital controls are abolished in greece.