How is the sovereign debt crisis affecting Greece’s relations with the Balkan countries and Greece’s standing in the region? An initial impact assessment
Greece’s politico-diplomatic and economic presence in the Balkan region was particularly dynamic during the period 1995-2008. During this period, mutually beneficial bilateral relations were developed at all levels. In the political and diplomatic field, Greece’s successful EU presidency managed to put the Balkans squarely within the accession map through the ‘promise’ offered at the 2003 Thessaloniki Summit. The image of Greece as a successful Balkan and European country and as an indispensable ally in the Balkan countries’ EU accession process was significantly strengthened. In addition, particularly strong links between Greece and the Southeast European countries were established in the sectors of trade, investment and banking. Moreover, Greece attracted hundreds of thousands of Balkan migrant workers, whose remittances contributed significantly to their home economies.
Since 2010, however, the Greek sovereign debt crisis – and the subsequent far-reaching economic, political and social impact on the entire region – has changed the dynamics of these relationships, and has had negative ramifications for Greece’s activities and presence in the region. Due to the interdependence between Greece and the countries of the periphery, the Greek crisis has produced a vicious circle whereby the economic decline of Greece has exacerbated the decline of the already-affected economies of Southeast Europe, which has fed back into Greece through inter alia a fall in demand for imports from Greece and a fall in the return on Greek investments. In addition, the political presence of Greece in the region and the image of the country also seem to be in serious decline.
There is no doubt that the impact of the crisis on the bilateral economic relations between Greece and its Southeast European neighbours, as well as on Greece’s political presence in the region, will be negative and possibly long lasting. The political and economic consequences of this development will have to be carefully and thoroughly examined in the period this project took place.
The project attempts a first assessment of the impact that the Greek crisis has so had on Greece’s standing in the region. It attempts to identify such impact at the level of politics, economy and business activity and the country’s image.