Friday 19 January 2018

Greek referendum result ‘no moral victory’ – Ibec

A pensioner argues with an official as he tries to enter a bank to receive part of his pension in Athens.
A pensioner argues with an official as he tries to enter a bank to receive part of his pension in Athens.
Colm Kelpie

Colm Kelpie

It would be "complete folly" to regard the outcome of the Greek referendum and the actions of Syriza as a moral victory for democracy, the head of Ireland's biggest business body has said.

Ibec chief Danny McCoy accused the Syriza-led government of brinkmanship and of acting irresponsibly.

And he warned the actions could have a knock-on effect across Europe.

"It would be a complete folly for us in the other jurisdictions to see what happened over the last couple of months - or even the last weekend - as any kind of moral victory for democracy or any of that kind of cat," Mr McCoy said, at a briefing on the outcome of the referendum.


"It is what it is. It's a sheer act of brinkmanship that could have disastrous consequences for the people of Greece. It also will have an impact across Europe, which has many problems to deal with.

"I think as citizens of Europe we should be incredibly frustrated by the antics of the Tsipras-led government."

Oil prices tumbled their most in three months yesterday in the wake of the referendum, however they were also affected by China's decision to roll out emergency measures to support its stock markets.

US stocks were lower in early afternoon trading, but were well off their lows earlier yesterday as investors remained optimistic that a deal could be reached to prevent Greece's exit from the Eurozone.

Stock markets globally fell, but analysts said the declines were less than expected due to expectations that the European Central Bank would act to limit any damage.

Adding to hopes of a deal was the resignation of Greek Finance Minister Yanis Varoufakis - whose style has reportedly irked some of his counterparts - and Alexis Tsipras' promise to present a package at an emergency Eurozone meeting in Brussels today.

Mr Varoufakis has been replaced by Oxford-educated economist Euclid Tsakalotos.

At the briefing in Dublin by Mr McCoy and former European Parliament President Pat Cox, the Ibec boss said the last six months of "discord" and "political grandstanding" had only served to "exacerbate the country's economic woes".

"The fallout from Greece's isolation in Europe will directly impact the country's ability to raise capital, attract investment, create jobs and improve living standards," Mr McCoy said.

"Debt sustainability is obviously important, but it is only part of the equation. Greece needs a competitive and dynamic private sector to drive growth."

He said the real damage has been caused to the potential growth rate of the Greek economy, which he claimed had been set back for a significant period of time.

Mr Cox said the trust between Greece and its creditors had been damaged.

"When you have your counterpart in negotiations accusing you of blackmail, economic terrorism and a soft coup-d'etat against his government, I do think it damages trust and confidence in a very objectively clear way," Mr Cox said.

He said the departure of Mr Varoufakis may help the situation.

But he added: "I found it extremely interesting that a series of senior German politicians - Martin Schulz the presidet of the European Parliament, Mrs Merkel today - have spoken about the need to be able to develop rapidly a humanitarian aid programme for Greece.

"That sounds to me very much like a powerful act of European solidarity as potentially part of an exit strategy."

Mr Cox said Mr Tsipras will be "front and centre" today, at the emergency summit of European leaders in Brussels, where he will get the chance to put something credible on the table.

"He can't go to the markets ... he can't borrow from the IMF. He can only borrow from other EU states. And although he's right to insist on respecting Greek democracy, he won't have the right ... to override and disrespect the due democratic process of other states, and this is the rock and the hard place."

However, IMF managing director Christine Lagarde said yesterday that the Washington-based fund was monitoring the situation and was "ready to assist Greece if requested to do so".

Irish Independent

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