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As Greece’s Banks reopen their doors for the first time in three weeks the country has avoided Grexit for now. Customers are only able to withdraw €420 per week and with cash running low Angela Merkel has urged Greece to complete its bailout deal ASAP. The bailout has been agreed at €86 billion with Greece having to implement economic reforms set out by its creditors.
Nonetheless, we have been here before Grexit still remains an option and there are three routes that Greece could follow to a Eurozone departure:
- The bailout deal is not concluded and negotiations fail. Some see this as a real threat and Wolfgang Schauble, German Finance Minister, states the Grexit offer paperwork is still in his top drawer should negotiations fail. Furthermore, the IMF says the numbers do not add up and will not sign unless European Creditors agree to debt relief.
- The bailout deal is agreed and completed but fails. If Greece’s fragile economy fails to recover and does not meet its debt targets then Alexis Tsipras has stated austerity measures will be increased. We have seen in the past the dramatic effects Austerity has on Greek citizens and it is a concern. If Greece fails to recover than Tsipras will have to concede defeat and opt for Grexit or have Grexit imposed by creditors.
- In a recent interview with The Financial Times, Donald Tusk the European Council President, said “something revolutionary is in the air”. Greece despite suffering 8 years of recession has not yet fallen foul to Insurrection. But the harsh reality is Tsipras and his Syrzia party have failed to deliver as have all Government predecessors and if this Government fails the Greek people have no democratic choices left. Many feel Insurrection could occur and Greece forced out of the Eurozone.
Since a bailout was agreed Alexis Tsipras has removed dissident ministers from his party and now has a loyal cabinet who will support implementing economic reforms set out by Eurozone creditors in the €86 rescue deal. Mr Tsipras is expected to announce a Snap Election in either September or October this year and opinion polls show he still holds an advantage over rivals, this would give him time to oversee Greece’s potential stay in the Eurozone.
Despite this not being directly relevant to the work we undertake at EU Property Solutions it is an interesting story to follow with daily developments. When Greece joined the Eurozone on January 1st 2001 no one could imagine we would be where we are today. We will continue to follow the story and break down the topic into smaller “snippets” of information for you.
If you are or know anyone suffering European debt issues, particularly related to property, then please call EU Property Solutions today on +44 (0) 330 124 1230 today to arrange your free initial consultation.
James Bell – Director