What if Greece leaves the EU

[zenfive]

The Syriza party in Greece seem as strong candidates to take control of the government in the upcoming January elections, some opposing parties suggest that they are wanting to untie the country from the euro zone and the EU. The leftist party has been popular among people because they are getting tired of living under tight austerity measures, and want to see a changed in the country.

Furthermore, a recent poll by a German news outlet suggests that 61% of Germans want Greece to leave the EU if they don't comply with the agreed upon expenditure cuts. This would certainly put pressure on the German government who has spent a lot on helping out the Greek economy.

Do you think Greece will leave the EU and euro zone anytime soon? If so, what kind of impact do you think it might have?

 

[Gabriel]

I don't think they can right now, it will take two generations for the country to be able to get back to how they were before. Greece is tied in and has dragged Cyprus down with it. I used to live there and things are so bad, people are leaving (expats) and the cost of living is impossible with the Euro.

Other countries have witnessed what has happened and they don't want the same to happen to them. It's hard for people who have no vested interest in your country telling you what you have to do. Unfortunately Greece is too far gone, and the thing is we all knew this could happen and Germany rules the EU and Greece is indebted to the EU. One may say if it hadn't been for the EU and the Euro, Greece would not have fallen? Greece now is like the dependent disabled relative and can't leave, but that doesn't mean other countries who are not as far gone yet, can't leave.

 

[missbishi]

Not at all, there is no way they could stay afloat. One perk of being a member of the EU is that you have free passage between countries. No visas required. If Greece were to leave the EU, it may well mean that it becomes a less appealing place to holiday if border controls or visa regulations come into force. Tourism is big business in Greece, particularly on the islands and they need all the revenue they can get right now.

 

[zenfive]

I agree with @missbishi on the point about the importance of tourism for Greece, it constitutes roughly 18% of their entire GDP, so not being part of the EU could potentially be very detrimental to their economy. That being said, it's not necessary to be a part of the EU to be part of the Schengen Area, which is the group of 26 European countries which have abolished passport and other border patrols on their borders. To take it a step further, if they had their own currency, which would most likely be weaker than the euro, more people might even prefer to go there since it might seem cheaper (compared to Spain or other nearby countries).

One may say if it hadn't been for the EU and the Euro, Greece would not have fallen?

The problem with Greece was, even before it joined the EU, it was overspending by far too much. Public sector wages were increasing too much, amid other big spending. And along with this, not enough money was coming in due to tax evasion and the like. Joining the EU and adopting the euro did leave them with less control though, and who knows maybe they could have kept the situation under control if they hadn't joined the EU.

 

[Gabriel]

One perk of being a member of the EU is that you have free passage between countries. No visas required. If Greece were to leave the EU, it may well mean that it becomes a less appealing place to holiday if border controls or visa regulations come into force.

You never needed visas anyway in Europe (if you live in Europe), the border controls only mean that you don't need to show your ID. Well before the EU or EEC was created Greece was a very popular tourist destination, it is less so now because of the lack of good hotels, shops and facilities. Staying in the EU makes no difference to tourism, in fact having the Euro puts people off going to Euro based countries. It doesn't confer any special rights at all and some places still have border controls, because at the airport not everyone will be arriving from an EU country.

 

[003]

Could they really make it, be completely independent without the other EU countries? They have done it before, without yet the other countries in the EU. And if I would be asked if what I think, I think that they would be able to make it. I mean if one is pushed to its limits, he'll only grow. It's just that despite their withdrawal for the union, they will not be pressured economically by the EU to show them that they can't actually do it alone, independently.

 

[Onionman]

I definitely don't think that it's in anyone's interest for Greece to leave. Maybe it might keep some people happy that they've cut off one of the weakest member states. But the whole project was about supporting the whole of Europe, weak and strong, for the common good of the region. And Greece can't really survive by itself.

 

[zenfive]

I agree, I think it will be very difficult for Greece to survive on its own because of the funds it receives from the EU. You have to wonder what would happen to Greece's credit rating and things like that if they left, and if their rating got worse, this would make it harder for them to borrow money (not like they want to keep borrowing money, but still, they'll need it).

However, you also have to consider that will things just keep getting worse if they stick with the EU instead of going their own way. Even if they do decide to leave, it won't be completely cutting ties with the EU countries, they could take up a role similar to Switzerland. So who knows, I guess we'll have to wait and see.

 

[JulianWilliams]

There's no reason why Greece would leave the EU. What they should do is leave the euro and go back to the drachma. Sure, they'll lose a lot of purchasing power when importing things, but that will lead to their economy being more competitive in relation to the other countries.

 

[globulon]

Popular opinion is one thing while reality is another. I don't think the Greek economy could hold without EU support. Not to mention the financial obligations and debts Greece holds to the rest of the continent, all of which are priced in Euros. In the event of any separation, any Greek-sponsored currency would likely plummet on the first day.

 

[Gabriel]

While it's not an option now, the signs are that there is discontent and that if there is a chance to leave later, then it would be a popular option. The Euro is weakening and if it continues then it will affect multiple countries. It's not like one fallen currency like the ruble will affect one country but all that use it. That was always the danger discussed before and now it's happening.

 

[zenfive]

Especially considering the major win of the Syriza party in Greece, who are forming the government with another leftist party, they seem to be leading the opinions of wanting to leave the Euro, but I agree, that won't be happening just yet, there will be far too much pressure from the big institutions and also countries like Germany, among others.

 

[KimberlyD]

I was just watching a video on BBC about this scenario. I don't think that it would quite happen as severely as it states in the video, but there will be a problem for the countries economy for a few years. However, their tourism and exports will be enough to sustain them as they change their currency and stand on their own feet. One thing I think will happen is Greece will probably adopt US currency. If I remember correctly, the US is their largest supporter in the realm of tourism and exports. More so the tourism, so changing over to US currency would be logical.

 

[Rowe992]

At this point Greece needs the EU more than the EU needs Greece. Greece benefit from the EU by having a stable currency even though their economy is in shambles. I don't see how leaving the EU will benefit Greece. The European Union will benefit more from Greece leaving than Greece itself.

 

[KimberlyD]

The reason Greece is doing it from my understanding is because the EU is unwilling to forgive their debt and they have no means to pay it. I am not sure of the whole story, but I have a feeling there is more to it then that.