Business leaders are warning that a Greek exit from the euro could hit demand for exports from the West Midlands…reports Asian Lite.
Paul Faulkner , chief executive of Birmingham Chamber, said that although Britain’s level of direct exposure to Greece was relatively small, any ‘Grexit’ could lead to a slowdown in the EU economy.
He said: “British lenders are owed about £2 billion by Greek banks, companies and individuals – this is a low level of direct exposure. British exports to Greece are also small.
“Direct exposure to the rest of Europe’s economy is also small, as Greece represents just two per cent of the eurozone economy.
“However, any Grexit could lead to an element of economic instability in Europe, and any slowdown in the economy could potentially lead to a lowering of demand for British exports.
“Also, a weaker euro, if that happens, will make British exports more expensive, although there is an opposing argument that a Grexit could make the Euro stronger, thus making British exports cheaper – it’s difficult to tell at this stage what will happen.”
Exports from the West Midlands have been rising steadily for the past four years, and the region now has the greatest share of UK exports. The region’s share is ten per cent, just behind London (11 per cent) and the South East (14 per cent).
The British Chambers Commerce (BCC) is also calling for action to be taken to stabilise the Eurozone in the event of a Grexit.
BCC director general John Longworth said: “With capital controls now in place and Grexit looking more likely by the hour, ministers here need to focus on minimising the immediate fallout for UK businesses and markets. Business also wants to see wide-ranging action to stabilise the Eurozone.
“The need to shore up the eurozone could create an opening for fundamental reform of the UK’s relationship with the EU,’’ he said.
“British companies will want Downing Street to seize the chance to secure far-reaching reform of the common market and the opt-outs required to support long-term growth here in the UK. Many of these reforms would also support the economic performance of the EU as a whole,” Longworth added.