Greek businesses in the UAE divided on the future of EU membership

Dubai: Greek businesses operating in the UAE said the failure of Greece and its creditors to reach an agreement which led to the introduction of capital controls on Monday and the country missing the deadline on $1.6 billion debt repayment to the International Monetary Fund (IMF) has not had any major impact on their businesses.

While some said, bank shutdowns have caused some inconvenience in making and receiving payments, they believed it will be temporary irrespective of the fact whether Greece remained part of the EU and the euro, after the July 5 national referendum.

“We are hopeful that Greece will reach a deal with the creditors and will remain part of the European Union and the single currency. I think the referendum will favour remaining in EU and a viable solution will eventually be reached on debts and the disputes on austerity measures. If Greece is forced to exit euro, that will be the end of EU and the common currency,” said Costos Moutzouris who runs Dubai based Adam Ship Repair.

Moutzouris said the recent developments leading up to the loan default and the bank shutdown have not impacted his business in the UAE and transactions with Greek counterparts.

A Greek businessman who runs an oil trading and oilfield services company based out of Dubai told Gulf News that majority of Greek people want Greece to remain part of the EU and want Euro as their currency, but they also would like to see Greece gets a just deal especially on the austerity front.

“As a Greek citizen I do not want see my country to suffer from negative growth and double digit unemployment for a prolonged period. I think the EU, the IMF and ECB should look at a pro-growth solution to the current crisis instead imposing unilateral unsustainable austerity measures on Greece,” he said.

Petros Kallidis, chairman of Hellenic Business Council in Dubai and Northern Emirates believes that Greek exit from Euro will benefit Greek economy in over medium term, although people will have to go through short term difficulties for the exit in terms of debasing of the currency and inflation.

“Greek exit from the euro will be better for the Greek economy. To put it in context, the Greek economy was growing at the rate of about 5 per cent before the country joined the European Union and the single currency. Because of the strength of the euro, Greece’s key industries such trade, tourism and hospitality sectors suffered. I believe that Greece will be better off with our own currency the drachma which will give the government the necessary policy flexibility to boost domestic economic growth,” said Kallidis.

Kallidis expects that in the referendum on next Sunday Greek people would to say an emphatic no to Euro which will lead Greece to exit from the currency bloc. “I believe it will help Greek government to address problems such as low growth and high unemployment more effectively. Return to the drachma will lead to substantial devaluation the currency which will come with some amount of hardships in the immediate future, But I believe Greece will become more competitive in its key sectors such as tourism and trade with a weaker currency,” he said.

But for many in the Greek business fraternity in the UAE an existence outside European Union and common currency is unthinkable. “We have been part of EU and the euro from the beginning and an exit at this point will be disastrous for the economy. We hope the government in partnership with the EU will come up with a solution to keep Greece within in the EU fold. A Greece exit could be the beginning of the end of the EU and the Euro,” said Moutzouris.

The current government came to power with the Greek people’s mandate to reject the repressive austerity measures that has been virtually strangulating the Greek economy. Thus, there are a number of people who think Greek exit from EU is inevitable as the government will muster enough ‘No’ votes in Sunday’s referendum.

“As a nation we are caught up in a vicious cycle of debt and debt repayments. I think a break away from the euro will help us to get back to growth in the near future,” said a food wholesaler from Greece.

Irrespective of the fact that Greece’s exit from the EU and common currency, by force or by the will of Greek people, could result in the eventual undoing of the euro.

“Grexit, I believe will be just the beginning of the undoing of the European monetary union. I expect to see a domino effect following the Greek exit with more nations opting out to the common currency to escape the ill effects a strong currency,” said Kallidis.