Athens.- (ANA, Reuters, Greek News)
Prime Minister Alexis Tsipras spoke with French President Francois Hollande on Saturday as the Greek government started to gauge the mood within the eurozone in the wake of the United Kingdom voting to leave the European Union, a result which Athens fears will make its life more difficult in the months ahead. Greek government sources said that Tsipras and Hollande discussed the “need to re-establish the principles of democracy, social welfare and solidarity” in the EU after 52 percent of Britons voted to leave the Union.
Britain’s decision to leave the European Union may hit Greek exports to the country and affect businesses and tourism, however the size and structure of the Greek economy will shield it from heavier losses, market executives and bankers said on Friday.
“Britain’s exit from the European Union is a heavy blow to European unity and economy,” Bank of Piraeus chairman Michalis Sallas told German newspaper Handelsblatt. “Regarding Greece, because of its small size and the structure of our economic relations, I believe the impact of the Brexit will be limited. Which is why I think the extreme, knee-jerk reaction of the Greek market is not justified.”
Earlier, Bank of Greece officials said the referendum’s impact on Greece will be small and its consequences limited, because of the capital controls.
Concerning exports, the negative result of the British vote could hit all the export-oriented sectors of the Greek economy, said Christina Sakellaridis, the president of the Pan-Hellenic Exporters Association. Speaking to ANA-MPA, she said Britain is Greece’s seventh largest customer and the devaluation of the sterling against the euro makes domestic products more expensive.
In tourism, one risk of the Brexit could be last-minute cancellations to Greek hotels as the purchasing power of British tourists weakens, the president of the Hellenic Federation of Hoteliers (HHF), Yiannis Retsos told ANA-MPA. He said if the devaluation of the sterling continues, there is a very serious possibility that last-minute bookings from Britain could suffer, adding however that at this point we cannot have a long-term evaluation of the consequences.
There is concern within the coalition about Brexit having a negative political and economic impact on Greece. Among the fears expressed by Tsipras’s aides is that some member-states might prefer to work toward a two-speed Europe, leaving countries like Greece lagging behind. This might also involve the member-states trying to take on greater authority in the decision-making process and sidelining the European Commission to some extent. Athens sees this as a negative development because it would complicate efforts to reach an agreement on restructuring Greek debt.
There is also concern about what impact a potential economic downturn in the eurozone could have on Greece’s weak economy. Greek authorities believe that the impact will be relatively small and that the tourism sector will not see a particularly adverse effect. Greece welcomed 2.4 million visitors from the UK in 2015, making it the second largest market for the country, but there is some concern that the declining value of the pound may lead to this number falling.
There are hopes in Athens that the economic instability Brexit is expected to create might encourage the European Central Bank to bring forward its decision to grant Greece eligibility for its quantitative easing program. The ECB said last week it would issue such a verdict once it has conducted its own debt sustainability analysis. This is not expected to be completed before November.
Sources suggested that there is no prospect of this process being speeded up and that in the current climate there is no appetite for increasing the ECB’s exposure to Greece unless the appropriate steps have been completed.
Brexit on austerity
Greek Prime Minister Alexis Tsipras, whose own rebellion against European Union policy brought the bloc to a crisis last year, said on Saturday he did not blame the British people for voting to leave but rather EU leaders.
Speaking to his leftist Syriza party’s central committee, Tsipras blamed the Brexit outcome on the “chronic deficiencies” of European leaders and their insistence on austerity policies that fed populism and nationalism.
“As much as the decision of the British people saddens us, it is a decision to be respected. We must not put the blame on the British people … when the borders remain open on austerity policies but stay closed for people,” Tsipras said.
Tsipras led his Syriza party to victory in two elections and a referendum last year in an attempt to end years of austerity imposed on euro zone member Greece because of its untenable debt.
However, he was forced by the euro zone to accept more conditions as a quid pro quo for another bailout and continued membership of the euro zone.
The outcome of the British referendum confirmed our insistence on the need for a democratic binding discussion on the future of the European Union in order to enhance social functioning and democratization of structures so that it operates in serving the people of Europe and is attractive to member states, Foreign Minister Nikos Kotzias on Friday said on the outcome of the British referendum.
Kotzias also expressed his concern “based on the developments of recent years and particularly in relation to the refugee problem, the growing fragmentation of the European Union trends” and stressed the “need to combat nationalism and extreme behaviors.”
He also noted that “priority of the European leaders must be the abandonment of punitive logic and entrenchment policies and the cultivation of a culture of democratic dialogue and consensus.”
The Britons’ vote to exit the European Union was a “wake-up call” that highlighted the need for change, Greece’s Alternate Foreign Minister for European Affairs Nikos Xydakis told the ANA-MPA on Friday. The EU’s progressive forces must now make their own vision for social cohesion, justice and solidarity in Europe convincing and dominant, he added.
Xydakis appeared confident that the European institutions, with their very deep historical, cultural and political roots, will have the strength to learn, adapt and chart a new course toward European unification. In this context, Brexit brought uncertainty but not the end of the EU, he added. On the contrary, it potentially marked a new beginning.
The EU must once again become attractive to its citizens, demonstrate that it respects their will and their real needs and that it hears their disappointment at an inability to handle crises effectively.”The EU has an obligation to remember why it was created after the horrors of WWII: for peace, stability, prosperity and democracy,” Xydakis said.
As he arrived for the EU General Affairs Council in Luxembourg on Friday, the minister urged calm and noted that the process of a British exit will be lengthy, while the other member-states and European institutions will be very adaptable and flexibile in facing the new challenges ahead. The EU continued to be the most prosperous and democratic zone on the planet and will remain so, he added.
New Democracy leader Kyriakos Mitsotakis called for calm and restraint after the result of the British referendum on Friday, adding it is a very difficult day for Europe.
Mitsotakis, who is visiting the island of Syros, said the result of the vote will clearly be respected but noted it also “forces everyone to look in the mirror” and see why the vision of European integration does not seem to attract European citizens anymore.
“We should turn this major challenge into an opportunity for Europe. Europe needs today more than ever, a new political narrative, which will be able to rejoin the idea of European integration to the daily life of citizens,” he said, adding this is the only way to bridge the gap between European and national policies and citizens who feel that the European project does not concern them anymore to the extent that concerned them in the past.
Opposition Potami party leader Stavros Theodorakis on Friday said that Greece needs to decide on a “national line” on Brexit, in statements after leaving a meeting with the prime minister.
“We are steadfastly in favour of a peoples’ Europe and now that Greece is the weak link in this Europe, we need a national line and to align with the European policy that will face the specific crisis. Only in this way will Greece not suffer the consequences and stop being the weak link,” Theodorakis said.
Europe cannot be unified by force, ANEL leader Panos Kammenos said on Friday in response to the results of the British referendum, adding that only dialog and justice can keep the continent united.
“If we want a united Europe, we have to decide we’ll be united everywhere,” Kamenos, who is also defence minister, said. “May the message that comes from England be a message which will indicate that the only way to have a united Europe is to have a fair approach towards all countries, to respect the decision of the people, and for allies not be transformed into creditors that blackmail,” he added.