Trying to exploit Brexit could backfire, says Peterson Institute senior fellow

25 June 2016
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Athens stands to lose if it tries to exploit Brexit to secure better terms in its negotiations with its European partners, Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics, has told Kathimerini in an interview about the impact Britain’s decision to leave will have on Greece.

If the government does this, he said, it will almost certainly face the rejection of its EU partners. He said it was like going to your neighbor while his house is burning down and demanding he return the 100 dollars you lent him.

The Brexit decision, he claimed, was bad new for Greece, as it now finds itself lower on the list of German Chancellor Angela Merkel’s priorities, as she will be more reluctant to spend political capital to resolve the Greek problem as she has to deal with more pressing issues. Greece, he said, must stick to everything it has agreed to as the country’s creditors are in no mood, given the current situation, to make any concessions.

Moreover, he said it will be difficult for Greece to get debt relief before it meets all the demands implicit in its bailout program, because, he insisted, the government plainly lacks credibility.

Greece, he said, will continue to receive rescue funding but it must stick to everything it has agreed to, including tough issues such as labor reform.

Given this lack of trust toward the leftist-led coalition, he said, Athens would find itself in a precarious position if does not follow through on its pledges, noting that the European Central Bank could easily withdraw its waiver on Greek bonds and not include the country in its quantitative easing program.

Greek tourism, he added, could also be impacted by a drop in visitors from Britain if the pound plummets.

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