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A year after Grexit scare, Greece faces Brexit fallout

One of the EU's most fragile economies is bracing for fallout from Britain's referendum. Greece has become ground zero for the EU's experiments - from austerity to refugee distribution. Omaira Gill reports from Athens.

One of the EU’s most fragile economies is bracing for fallout from Britain’s referendum. Greece has become ground zero for the EU’s experiments – from austerity to refugee distribution. Omaira Gill reports from Athens.
There has been little sympathy for the EU in a country that is constantly faced with the effects of its policies – from a six-year economic crisis to an unresolved refugee crisis. Despite this, the news that Britain has chosen to exit the European Union was largely met with stunned surprise in Greece.

There were storms across the United Kingdom on Thursday, but in Athens a warm summer’s night saw in the results of the referendum. In the end, the Brexit succeeded where a threatened Grexit had not. It was just under a year ago that Greece held an ill-fated referendum against EU austerity policies, and the reaction in Athens to the looming Brexit has been mixed.

Some Greeks feel that Brits were right to make a break for independence from the European Union. Others are more cautious. They feel that Britain has taken an unnecessary gamble: The European Union may be flawed, but it still beats the alternative, and the predicted domino effect from the Brexit may well have a negative impact on the economy of Greece – a country that is in no position to suffer any further blows.

‘The democratic decision’

As Thursday night unfolded and the Brexit began to appear more and more likely, the pound plunged to a 31-year low against the dollar. Dawn broke with the state TV channel ERT playing looping footage of Nigel Farage declaring victory “without a single bullet being fired” and debates about the UK Independence Party leader’s poor choice of words.

On news channels, bleary-eyed analysts discussed the European Union’s health and how Greece might re-evaluate its business relationship with the UK in light of the result – especially in relation to the vital shipping and tourism sectors. Silence took over at various points, with presenters unable to hide their surprise as more results came in in favor of Brexit.

“We need to fully respect the democratic decision of the British people,” Dimitris Papadimoulis, who leads the ruling Syriza party’s delegation to the European Parliament and had taken a staunchly anti Brexit stance, told DW. “Nonetheless, we should admit that it takes strong efforts and hard work from progressive and democratic forces to shift the decline of the EU’s common values and rise of far-right parties.”

“The left should be standing firm on this big challenge as neoliberal and austerity policies have completely failed,” Papadimoulis said. “The EU must change: Otherwise, it will face the risk of dissolution.”

Market turbulence

Fifty-three-year-old Christina Gregson has lived in Greece since 1994 and teaches at an Athens private school. In the buildup to the referendum, she had favored a Brexit based on living through the fallout from the European Union’s econominc policies toward Greece, but at the same time had been concerned about what a Brexit might mean for the 45,000 or so British citizens living in Greece.

“The EU, and Germany especially, have failed because they have consistently used a tone with Britain that was autocratic and bullying,” Gregson said on Friday, after waking to the news that the Brexit had in fact succeeded. “That worked on Greece because it’s tiny and poor. But ‘Project Fear’ and project ‘Do as You’re Told by Brussels – We Rule You’ was and is a recipe for disaster.”

Another major concern for Greeks, residents of other EU nations and Brits alike is the market volatility that began before the successful Brexit vote was finalized.

“The problem is the economy and financial markets,” the eurozone analyst Yannis Koutsomitis told DW. “We know that Greece is the weak link in the financial structure of the eurozone right now. If there are disruptions, Greece will be affected and is affected – because we see today that Greek bond yields are surging again, and also the Greek stock market has been hit hard.

“I would expect also some period of uncertainty about Greece’s investments because I’d expect that in such turbulence investors will be very reluctant to expose themselves to new projects, especially in countries that are not very stable yet. We have to see what the reaction will be.”

The Athens Stock Exchange was down over 13 percent by the end of trading on Friday, but there was a more immediate concern on the streets of the capital. Britons have long been some of the country’s most faithful visitors. Data from the Bank of Greece stated that arrivals from the UK rose 14.7 percent last year. With the sterling hitting all-time lows on Friday, many are worried about what effect Britons’ decreased spending power might have on Greece, which cannot afford any damage to its one economic strength: the tourism sector.

It appeared to be business as usual in the tourist district of Plaka on Friday. People strolled the streets and shopped for souvenirs. Michelle, 37, an administration employee from Warrington who did not want her last name used, had voted by post to leave the European Union. In fact, 54.3 percent of voters in her district favored leaving. “I do think the media are biased and making us out to be demons,” Michelle said. “We’re not. I think a lot of people in Europe are upset, thinking that we don’t like them, when that’s not true.

“We wanted to distance ourselves from the bureaucracy and the politics of the EU – not the people. And that’s what we need to get across.”

Though rumors were circulating on social media that British tourists were having difficulty exchanging sterling for euros, Michelle said she had not experienced that. British ATM cards appeared to be working normally.

Emmanuela Mathioudaki, a 50-year-old who owns a jewelry shop in Plaka, said she wasn’t worried that the falling pound might affect business. She said it had been years anyway since she had experienced the volume of customers she used to. “I think Britain did the right thing,” Mathioudaki said. “When the European Union isn’t operating as a union, it’s better to break it up and see what happens. There are always consequences – let’s see those, too.”

Friday felt something like a replay of Greece’s own recent political past. There was an unprecedented referendum; a prime minister resigned. Britain’s referendum exposed deep divisions in society, and now the country must work on rebuilding trust with its bitterly disappointed EU partners. That’s pretty close to the position Greece found itself in about this time last year.

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