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Greek rioters throw stones at police near the Parliament building in central Athens, Greece, Wednesday, Dec. 10, 2008. A fifth day of rioting erupted in the Greek capital on Wednesday, on a day with pitched battles between police and rioters. The troubles started following the fatal shooting of a 15-year-old boy by a police officer Saturday night. (AP Photo/Bela Szandelszky)
Shaun Lowthorpe, Business editor
Friday, May 18, 2012
Just how worried should we be about what happens in Greece?
Gripped in a debt crisis seemingly without end, and a political stalemate which may or may not be resolved in fresh elections next month, Greece appears to hold the future of the EU and the euro in its hands.
It is easy to see why some are getting nervous that the Greek crisis may be about to engulf us all, and you cannot underestimate the importance of EU trade to firms in this part of the world.
Figures from HM Revenue and Customs showed that EU exports from the East of England at the end of December 2011 were £17.47bn, up 27.7pc year on year, a significant slice of the £27.4bn total.
Little wonder that if Europe sneezes then this country will catch more than just a cold – and it is the reason why many businesses in Norfolk are keeping a close eye on what is going on.
But the biggest effect of the crisis seems to be an indirect one – that of adding to the general lack of business confidence in UK plc.
Leszek Wysocki, international trade adviser at UK Trade and Investment, who advises many firms across the region on exporting, said many firms exporting to Europe were actually bearing up well.
“The single most important thing is finance,” he said. “For companies working in Europe they are being exposed to a significantly-fluctuating exchange rate. If any business has any worries they need to talk to their bank.
“But Greece is open for business –nobody is going to say ‘don’t go to Greece’ and if you already have established links and contacts there you should carry on doing what you have always done,” he added.
“For new businesses, they are probably not turning to Greece as a first market as they can see its depressed economy and they are more likely to look at other areas to operate in.
“Looking at the private sector in Greece, a number of companies have developed their businesses in South East Europe, in places such as Macedonia and Albania, so there are still opportunities for UK companies to explore those markets through Greek partnerships. The Greek government is planning a major privatisation programme which includes ports, airports and public utilities, so if you keep your eyes open there are profits to be made out of difficult situations – it’s not all necessarily bleak.
“I travel around many businesses and the sense I get from UK exporters is that some are doing very well. It’s difficult out there but company turnovers are shoring up quite well. Sometimes they have to work harder, but I don’t get that pessimistic view that the media is plugging.”
Andrew Bell, chief executive of Norwich International Airport, said at a retail level, the crisis was actually presenting opportunities and there were signs that travellers in Norfolk were seizing upon them.
“Bookings are looking very positive and the environment doesn’t seem to be putting people off,” Mr Bell said. “Corfu flights are selling as well as they ever did and it isn’t deterring people from booking.
“The fact that the euro is getting cheaper is definitely a good thing as it makes it cheaper for people to go on holiday. Another benefit is that operators are more likely to buy extra flight capacity from European carriers, which could make flights cheaper. When the euro strengthened the price they had to charge made it prohibitive and that’s one reason why the airport network contracted.
“But from a national industry perspective, the uncertainty being caused isn’t a good thing, particularly from the point of view of investment markets and confidence and the sooner that’s resolved the better.”
Paul Waters, sales and marketing director at the Travel Centre, said: “A weaker euro is obviously a good thing for those going to Europe because their money is going further. But it has had an impact on people wanting to travel to Greece. People’s perception is that Greece is broke and falling down, but like anything as soon as we explain that it isn’t the tourist areas or islands where the problems are, they are ok. And if you are looking for a bargain, Greece is a great place to go.
“Spain is also still one of our top destinations. Its economy isn’t having a great time, but which country is? And if the euro stays weak for the next six months, that’s going to make holidays next year even cheaper.”
Richard Tunnicliffe, director of the East of England CBI, said the main impact of the Greek and Eurozone crisis was the indirect effect it was having on business confidence levels generally.
“The big impact is on confidence,” he said. “I saw a company this morning which has got no exposure in Greece and very little exports to the eurozone, but while this is happening they are lacking confidence at a time when we need it. That’s why we are calling on the politicians Europe-wide to sort out the infrastructure.”
However behind the business issues, the crisis in Greece is also having a human impact, which is touching on people’s lives in this country.
Constantinos Cafetzoglou, 74, is the former owner of the Lantern restaurant in Sheringham. A UK resident for more than 50 years, he regularly visits his younger sister on the outskirts of Athens.
“I’ve just come back from Greece,” he said. “Things are really bad. They are finding the austerity very hard to cope with. Some people only get 500 euros and they have to pay 300 euros in rent and 200 euros is not a lot to live on.
“The wealthy ones have got away with it, it is the poorer people who have to pay. My family is fairly comfortable but even they have problems. I know most people don’t want to come out of the euro but I don’t think they should have gone in in the first place.
“I’ve always regarded Greece as fairly prosperous, particularly with the tourism industry, the Aegean islands are full every year, but to see soup kitchens in Athens is very bad.
“There’s lots of satire about it all, people are blaming the French and the Germans, but I think the new French president has realised that the austerity is far too hard, they won’t get any growth out of it –businesses are closing down, it’s too sharp.”
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