Grexit could wipe millions off NI export income
Northern Ireland’s annual £9bn of revenue from exports is set for a major hit should Greece leave the single currency, according to a leading consultancy firm.
Greece is understood to be on the verge of leaving both the Euro and the European Union following a breakdown in negotiations over paying back huge debts.
Greek ATMs and banks were shut on Monday, forcing the government to appeal for calm and take drastic action amid scenes of panic at supermarkets and service stations.
The population is to vote on a referendum on July 5 on whether to accept further fiscal hardship demanded by the European Troika (the European Commission, European Central Bank and the International Monetary Fund).
The vote has been described by Jean-Claude Juncker, president of the European Commission, as effectively an ‘in out’ vote for Greece’s continued membership of the currency and the union.
With Europe braced for the referendum’s outcome, chief economist at PricewaterhouseCoopers, (PwC) Dr Esmond Birnie, has warned the crisis could see NI lose millions in income from its exports.
Dr Birnie said modelling exercises carried out for the Scottish economy in 2011 and 2012, showed a Greek default could knock 1% of its GDP.
Should the same apply to Northern Ireland, it would mean £300 million less in NI’s already straitened coffers, based on an estimated GDP of £30 billion.
While embattled Mediterranean economies of Portugal, Italy and Spain are expected to suffer worst in the case of a Grexit, economists believe the shockwaves will spread throughout the continent and beyond.
According to Dr Birnie, NI sold just £8.5m of its manufacturing exports directly to Greece last year, but its exports to countries across the EU, including Ireland and more exposed nations, are worth almost £9 billion.
The PwC economist said he believed Grexit-provoked economic difficulties in those nations could have a knock-on effect for NI exports, and ultimately, the economy.
“Anything that knocks the Eurozone economies off course actually does matter to us,” he said. “A Grexit would be a Greek tragedy, not just for the people of Greece, but for the rest [of] the Eurozone, the UK and Northern Ireland too.”
