Friday 15th June 2012

Expats may count the cost of Eurozone exit

Expatriates living and working in Greece are watching this weekend’s elections with dread as they fear the run on Greek banks that may occur if the Left-wing Syriza party emerge triumphant.

Many expatriates are concerned that a return to the drachma in Greece may mean that they lose vast amounts of money and are unable to meet their existing financial commitments.

There is no doubt that this weekend’s election is extremely important in Greece for both expats and natives alike. The election rerun is really shaping up as a referendum on whether the population wants to support the severe austerity measures imposed as a condition of bailouts and continued euro membership or whether they wish to abandon the Euro and return to the drachma.

The threat of what may ensue has already caused expatriates to leave the country in their droves and those that have yet to leave are literally stashing Euros in their homes or sending them offshore to relatives abroad. Speaking to Australian newspaper The Herald Sun, Greek-born Melbourne resident Demi Markogiannaki said yesterday that some of her family members had sent money to her for safekeeping: “Everyone is scared of losing their money and they know the Australian dollar is going to be strong and nothing's going to change with it,” she said.

For many expatriates, sending money overseas will just not be sufficient. Those that own bars, hotels and restaurants will find that the value of their businesses will plummet overnight yet they will retain the full mortgages and loans that they will be required to pay back in Euros, a currency that even in its devalued status will be significantly expensive compared with the drachma.

Meanwhile, earlier this week, the European Commission denied that they were preparing a “script” for the Greek exit from the eurozone. Reacting to accusations that the commission was planning for the Greek’s return to the drachma, a spokesman commented: “We have no plan providing for Greece to exit the eurozone. The commission is not working on a Greek exit plan of any kind.

“If there are some persons in the member states or elsewhere examining the possible repercussions of such a scenario or of any particular scenario that is their business, but our job is to work on the basis that Greece will stay within the euro and to ensure, as guardians of the treaty, that the treaty is respected.

“Others are doing speculative scenarios - we are providing legal clarification on these elements. That does not mean that the commission is working on a scenario. That is not our job.”

Are you an expatriate living in Greece? Please share your thoughts of the pending election with our readers.

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