The Greek government is on alert regarding the wider, regional implications of a broader Syrian conflict, not least for Greek tourism, which is the country’s heavy industry.

Equally importantly, the prospect that a Syrian conflagration may have a negative impact on global markets, just as Greece prepares to exit its bailout programme and return to the markets, in about four months, is cause for serious alarm.

US President Donald Trump’s bellicose tweets yesterday already had a negative impact on the Greek stock market, which is closely monitoring developments in the Aegean and Syria.

Market players and political figures who spoke to identified five main categories of concern for Greece.

  1. The first concern regards the economy, as a US-Russian clash would shake world markets, raise interest rates and make it more difficult for investors to liquidate their assets. With the Greek government pursuing a clean exit from the bailout memorandum in August, it will be difficult for Athens to stand on its own feet and to negotiate debt relief on favourable terms. Already, based on the prospects of the Greek economy, Athens would borrow at a four percent interest rate, many times more what it is paying its lenders now.
  2. The impact on tourism is also of paramount concern. The tourism sector rakes in 15 billion euros in annual revenues and produces many thousands of seasonal jobs. Greece is an hour’s plane ride from Syria and Cyprus is next door, and a US-Russian conflict of unknown duration will deal a blow to both countries’ tourism. Players in the sector are also concerned about the Aegean islands, which are already tremendously burdened by increased refugee flows from Syria and migrants from elsewhere.
  3. A third issue is a surge in terrorism, a scourge that Greece has successfully avoided to date. There are concerns among some that the use of the US base at Souda Bay, Crete, and of American drones stationed at a Larisa air base, could draw negative attention and trigger reprisals, though this has never happened during the use of Greek facilities for American military actions in the past.
  4. The fourth matter is the prospect of a major surge in migrant flows to the Greek islands, which already have 15,000 refugees and dozens more arriving daily
  5. The fifth issue is what the geopolitical balances and Turkey’s stance will be after a prospective conflagration. Erdogan now is turning away from the West and Nato and is approaching Putin, though he maintains communications with Trump despite extremely tense relations. The question is how Ankara will react if the Russians respond to an American attack, and how a war would impact on Greek-Turkish relations and on escalation in the Aegean?

Vasilis Kanellis



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