German Vice Chancellor Sigmar Gabriel called the outcome of the British referendum “a bad day for Europe,” but is is likely to be a lot worse for Greece. When you’re already in intensive care, the last thing you need is an earthquake hitting the hospital. The world, of course, will not collapse and take Greece down with it just because 52 percent of Britons decided they want to leave the European Union, but the waves caused by this decision on the global economy certainly will harm the Greek economy, which needs some calm to recover.
Greece has been surviving on money from its lenders and revenues from tourism. It is in its best interests for its partners, and its tourists, to keep prospering and getting richer. The recession that is predicted for the European economy – even if brief – will make our European partners more wary of additional expenditure at a time when a lot is at stake for the Greek bailout program. The victory of the Euroskeptics in the UK will bolster populists across the bloc and they are the staunchest critics of bailouts for the “laggards of the South.” What is certain is that pressure from the Euroskeptics will make it harder for governments in the North to negotiate a Greek debt reduction, which will be seen as giving away their taxpayers’ money for the sake of cohesion.
The rapid drop of the pound, moreover, will make many Britons think twice about a holiday abroad. Of course, many package holidays were booked well in advance of the referendum and the negative impact will be minimal this year, but the countries favored by British holidaymakers are sure to feel the pinch in 2017 – among them Greece, which needs the revenue now more than ever.
The worst of it all is that these developments are coming at a time when Greece has the most ignorant government in its history in terms of international and European issues. It has a prime minister who thought he could frighten Europe with threats of a meltdown, ministers who weep at every privatization and a former bartender as an adviser for strategic planning.
Greece has the misfortune of having the most inadequate leadership possible for such a juncture, and it may end up paying a lot more for Brexit than the Britons themselves: Note that on the day after the referendum, the London Stock Exchange opened with losses of 7 percent that it contained to 4 percent, while its counterpart in Athens ended down more than 13 percent.
Published in ekathimerini.com June 25, 2016