“Grexit” fears subside but could “Brexit” portend an apocalypse?

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Grexit concerns abate, Brexit remains the key focus

In the quaint summer of 2015, Europe, particularly Greece, was simmering, probably reminding one of the 1980s hit number “Cruel Summer” by British female pop band, Bananarama. The prospect of Grexit (Greece exiting the single-currency union of 19 countries, the Eurozone) was pretty real, leaving the European leaders fretting……and sweating! In August 2015, Greece, the birthplace of the Olympic Games, managed to obtain an €86 billion bailout, soothing frayed nerves among European leaders. Ironically, almost a year down the line and in the year of the Olympics, it was déjà vu as Greece stood near the Eurozone’s exit door yet again. However, in May 2016, Eurozone leaders hammered out a deal to release €10.3 billion (out of €86 billion) to Greece, and also announced their intention to consider debt relief to the embattled nation, leading Grexit fears to almost “Come Undone” (heard that track from British band, Duran Duran?).

Brexit fears to the fore

With Grexit fears having eased, all eyes are now set on the outcome of the Brexit poll to be held on June 23, 2016 as Britain seeks a referendum from its citizens to stay in or leave the single-market European Union, EU (the union of 28 European countries). If Britain votes for a divorce from the EU, it will have to notify the European Council of its decision, following which the UK will have two years to negotiate the terms of its exit.

Supporters of Brexit argue that post-Brexit, the UK would be able to wield more control over regulations, expand trade relationships (breaking free of the low-growth EU region) and not be required to contribute funds to the EU. On the contrary, here’s what Brexit critics opine:

Considering the above factors, breaking away from the shackles of the EU could have deep ramifications for the UK. As the clamor against Brexit seems to be growing louder by the day, if citizens shun the option of quitting the EU, it could prove to be a historic event for Britain; a “Red-Letter Day” (a song by British pop stars, Pet Shop Boys)!

While many citizens would have grooved to the rendering of songs by fellow British artistes mentioned in this blog, the jury is still out on whether the nation’s votes on June 23 would swing in favor of the “Remain” or the “Leave” camp.

Ashish Tendulkar
Ashish Tendulkar
About the Author

Ashish is an Investment Research Lead Analyst with more than 9 years experience in equity research on the buy and sell side, covering several geographies and sectors. Ashish has a masters degree in Management Studies & Finance and is a current CFA Level 3 candidate.