I covered the Greek debt crisis in 2015—and as Brexit negotiations continue the sense of déjà vu is profoundby Duncan Weldon / October 23, 2017 / Leave a comment
In the summer of 2015 I moved to Greece. Well not actually, but I might as well have done. Throughout the time between January 2015’s election of a Syriza government and July 2015’s final deal on Greek membership of the euro I was BBC Newsnight’s economics reporter and, with the exception of the small matter of a UK general election, Greek matters came to dominate my job. During the crucial period of late May to early July 2015 I was more often to be found in Athens than London. During that time I racked up a fair few Aegean air miles, became overtly familiar with the room service options in the Novotel Athens (I recommend the kebab, avoid the pizza) and learned a great deal about the European Union reacts in a standoff.
Much of that experience has felt eerily familiar over the past 16 months or so as the Brexit process has unfolded. Of course there are important differences. The outlook for the UK economy has darkened recently and, once again, inflation is running ahead of wage growth squeezing real incomes. But the UK’s position is nowhere as precarious as Greece’s was, either in terms of the pain already suffered or the potential consequences of the talks going wrong.
Differences aside though, the fundamentals do induce a sense of déjà vu. Like the Syriza government in 2015 the UK position is best summarised as “having our cake and eating it.” In 2015, Alexis Tspiras won on a platform of “ending austerity” and “staying in the euro.” Given the institutional setup of the eurozone—and where the balance of power lay—that combination proved impossible and eventually he was forced to back down and choose one or the other. Similarly, the UK began the process with aspirations to maintain as close a trading relationship as currently with the EU whilst also reducing payments, ending free movement of labour and gaining the ability to strike trade deals with third parties. As in the Greek case, the final outcome will differ.