By- Amrita Dubey
Grexit has been widely debated in the past few years. But the latest acronym to have entered the economic discourse in the last one year is Brexit. Grexit is referred to the potential Greek exit from the Eurozone, while Brexit is the prospect of the United Kingdom leaving the European Union.
Grexit Although Grexit seemed a very probable event last summer, the idea has lost merit over time. The notion that a Greece exit could pave the way for other
Although Grexit seemed a very probable event last summer, the idea has lost merit over time. The notion that a Greece exit could pave the way for other debt-burdened states like Portugal, Spain to reject the path of austerity forced the authorities in Brussels to issue a third bailout for Greece
The Greeks were caught between a rock and a hard place. With the strong Euro, they couldn’t export their way out of a crisis as other nations in the past had done. But leaving the Euro would be accompanied by a period of uncertainty which could have led to further economic hardships for the Greek public.
It arose because of PM Cameron’s election promise to conduct a referendum on whether the UK should leave the EU or not. Supported by the political right and opposed by the political left on both sides of the Atlantic, it has sharply divided opinion among the British people. Proponents feel that Britain has been held back by the EU on account of red tapes and want to have more control over its borders to reduce the number of migrants coming into the country for work. The opposition believes that leaving the EU would lead to lower growth, impact investments and exports and in general increase risk to financial stability.
Since there has not been any precedent of such exits, there are a lot of uncertainties over what would really happen if Grexit and Brexit were to come true. Although both the events might not materialize but the fact that more and more people are questioning the concept of the EU does not augur well for the future of Union.