Brexit will cost Greece up to 0.8% of GDP

The British exit from the European Union will have consequences for the Greek economy, especially on tourism, Deputy Minister of Foreign Affairs George Katrougalos said on Monday (8 May).

Referring to data from the Bank of Greece, Katrougalos warned that the effects would range from 0.4% to 0.8% of Greek GDP (€800 million to €1.6 billion).

Speaking at the Greek Parliament’s European Affairs Committee about the Brexit process, the leftist politician said the biggest losses were expected in the tourism sector. Approximately 2.4 million British tourists visited Greece in 2015, spending about €2 billion while on holiday.

When Brexit is completed in 2019, the fall in foreign exchange earnings is estimated to range between 2.29% to 6.3% of the total volume of revenues coming from British tourists, he said.

Regarding exports to the UK, which account for 10% of the total, he claimed that the amount of the loss would depend on the Euro-pound exchange rates.

“We are currently moving into uncharted waters, as not all mechanisms have been activated in order to have a clear picture of the impact,” the minister warned. 

Katrougkalos said Greece’s objective in the Brexit process was to avoid negative financial implications on its budget, and keeping tuition costs for Greek students in the UK at existing levels.

Regarding the 73 seats that British MEPs hold in the European Parliament, the Greek minister opposed their abolition and backed Rome’s proposal for their relocation to the rest of the 27 member states.

He also asking for cross-party support for Greece to host the European Medicine Agency, currently located in London.

“It is important for Greece in terms of local growth,” Katrougkalos recently told EURACTIV.com. “Indeed, due to the crisis the country has been faced with, the presence of such an EU agency will significantly contribute to speeding up growth,” he said.

A special committee has been established for that purpose, led by Rena Dourou, the governor of Attica region, as well as representatives from the pharma industry.