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How Brexit will affect Greek economy struggling to survive in recession environment?

Brexit negotiations between UK and the European Union are still to start. Whatever the outcome one thing remains sure: the impact on Greek economy will be big both in bilateral and EU level, especially in trade and tourism. And this at times when Greek business struggle to survive in an environment of seven-year-long economic recession.

Britain holds the 7th position on the Greek exports list. Exports to UK amount over €1 billion annually. A disruption in the trade relations will have serious consequences on the recovery efforts of the Greek enterprises that increasingly rely on openness and competitiveness in order to survive.

In this context, the Hellenic Federation of Enterprises and the Union of Industrial and Employers’ Confederations of Europe (Business Europe/UNICE) issued a statement calling for an agreement with Britain to ensure effective access of Greek products in the British market. Losing the British market will have a significant impact in areas such as industrial products (€350million), chemicals (€200million), food (€350million) etc.

SEV wants the maintenance of the single market integrity, to ensure the closer economic relations between the EU and Britain as much as possible, organizing a smooth transition to a future trade agreement, to limit the negative impact of Brexit and participation of all stakeholders in the negotiations between UK and EU.

Equally important will be the impact of Brexit on tourism. Greece should expect a decrease in tourist arrivals as the devaluation of the British Pound against the Euro will reduce the purchasing power of the British and their travel options. It is estimated that each year over two million British tourists visit Greece.

A question mark can be added to the future of about 60,000 Greeks who live and work in UK. Already Deputy Prime Minister, Yannis Dragasakis, met with the British ambassador in Athens, Kate Smith, to discuss the issue, namely, the legal framework about Greeks in Britain.

The British government seems to insist on migration and the privileges enjoyed by foreign workers in the UK, which means that Greek employees in the UK may find themselves faced with very stringent bureaucratic procedures, limited access to welfare benefits from the state and less favorable working conditions than the British.

Greek students in UK  are likely to face an increase of up 40% in university tuition fees.

“Problems will also affect the banks due to the reduction in value of the portfolio of Greek banks placements in UK banks” warned the president of the Commercial and Industrial Chamber of Athens (EVEA), Konstantinos Michalos.

Brexit automatically means also  a decrease in the European budget for programs such as agricultural subsidies which benefited Greece for years.

In 2015, UK’s contribution to the EU amounted to €18.2 billion, the fourth largest in the EU with 15.35%. In 2014, UK’s contribution was €11.3 billion (9.73%)

Missing these resources means that both other European countries will need to fill the hole and reduction of  European spending in subsidies and programs. (newmoney.gr)

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  1. I don’t think you need worry about tourism from the UK post-Brexit. The UK does not want to make it difficult for UK citizens to visit EU countries for tourist reasons, nor would they want to make it difficult for EU tourists to visit the UK. I’m pretty sure that, for tourist purposes at least, things will not change that much either for the EU or the UK. As far as EU citizens already living and working or retired in the UK and UK citizens already living and working or retired in the EU are concerned the most obvious solution is to give them automatic permanent resident status in the respective countries. That would be simple and cost nothing. Reciprocal healthcare is another issue but this has never been a problem for the UK and neither the UK nor the EU would want to stop tourists visiting the EU and the UK because of healthcare worries. The simplest solution is to simply continue the current arrangements.

  2. Devaluation refers to a decision to lower the exchange rate in a fixed, pegged or semi fixed exchange rate. The pound is not in a fixed exchange system. We can speculate and, if any one does know what the exchange rate will be in a couple of years time, please sent me the tip so I use it in the Forex markets. There has already been considerable depreciation in the pound as the exchange markets try to anticipate the effects of Brexit. Yet, according to Thomas Cook, the demand by British tourists for Greece this year is high. Events in Turkey have helped. Something we should worry are the new airport tax levies, VAT & prices in the islands and other direct and indirect effects of the conditions imposed on Greece by its creditors. Note, depreciation in the pound would reduce the non-fee costs of studying in Britain. How much of this would compensate for any increase in fees is another question.

  3. costa sakellariou

    the same agricultural subsidies (part of the eu agricultural quotas program) that greece received for years that has gutted greek agriculture? what? people want more of the same?

  4. Answer is to press teh Greek Government to take an active and constructive role in the negotiations between teh EU and UK. On Greek Citizens resident in the UK and vice versa perhaps Tsimpy should have spoken up before now. Mrs May raised this issue at the December Council meeting and was met by rudeness from the other 27 including the Greek Government. At the end of the day this is really a matter for bilateral negotiations, so I suggest all Greek put pressure on your own Government.

  5. The problem I can see lies with the vindictive nature of Germany and its satellites. They want to see the UK suffer as an example to anybody else having similar ideas. They applied the same principle with Greece and, with a little help from their local friends, ruined the entire country. It is the UK’s turn now to taste the medicine, though the UK is not Greece.

  6. In reply to two posts here. The issue with EU citizens resident in other EU countries is a terrible problem, and one that Adolfa May refuses to deal with appropriately as a matter of law and of morality. In her typical fascist way, she is trying to hold EU nationals in the UK hostage for the Brexit negotiations. This is more the style of a terrorist than of a politician, but I would be prepared to say that the current mob of hoodlums in government now are not decent human beings.
    The problem of the rights of EU citizens after Brexit is one that has been made by the UK and not by the EU. Today, Hollande emphasised to the Empress Theresa that no trade deals will even be discussed until the position of several basic things is sorted out properly. One of those things is the legal position of EU nationals in the UK and Brits in the EU. It should not take a Frenchman to tell British politicians what is not only obvious but also morally imperative, since it concerns people’s lives and security. I repeat: what the UK government is doing is akin to terrorism.
    As for tourism in the future, who knows? Relations between the UK and the EU are now so bad that anything is possible. Non-EU visitors to the UK complain loudly and endlessly about how badly they are treated with their visa applications, often academics and doctors being denied visa, and one of the main criteria for being granted a visa is now — wait for it — how much money you earn. It is predictable that pieces of excrement like May — a merchant banker married to another merchant wanker — cares only about money. Frankly, the UK has dropped so low, one can only pray for its future. Just a very sick place, these days.

  7. Brexit wont mean to much for the Greeke ecoenomy, nor will the Danxit (I know what is publicly posted, but trust me, its dam close) Neither countries are in the Eurorozone (for VERY good reasons, among those…Greece) – but it’s gonna hurt when the smaller countries that are in the Euro zone are gonna leave, or even worse France…