On Grexit, the EU and a Bailout: Taxlinked.net Members Speak Out!

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists. 2015

What is Going On in Greece?

Following a turbulent weekend, Greece woke up Monday morning to closed banks, stringent capital controls and plenty of uncertainty regarding its future as member of the Eurozone.

Stock markets throughout Europe stumbled out of the gate this week upon announcement of the Sunday July 5th, 2015 referendum.

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What is Going On in Greece?

The FTSE in London fell by more than 2%, while markets in France and Germany dropped by 4%. European banking shares alone lost 10% of their value amid fears of a Greek default.

Banks in Greece, as well as the Greek stock market, will remain closed until July 7th, 2015 and ATM withdrawals have been limited to 60 Euros per day.

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What is Going On in Greece?

Fears of a Euro collapse have shaken the continent. A Greek departure might lead to a domino effect, further weakening already fragile economies in Spain, Italy and Portugal, and also forcing them out of the Euro.

While financial experts believe the European banking system is better equipped this time around to mitigate the impacts of a Greek default, the fact that this is unchartered territory makes it difficult to predict the market’s reaction to a Grexit.

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What Taxlinked Members Say About Grexit

“It is unclear how the Greece issue will affect the EU because many things need to unfold in the next few days and weeks. Since Greece has announced it will not repay its loan to the IMF, it remains to be seen what this default will trigger both in Greece, the EU and the international banking system.”

Belinda Wong Director at Leader Corporate Services Limited in Hong Kong

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What Taxlinked Members Say About Grexit

“The situation will push more people to move their businesses, assets, and wealth away from Europe’s PIIGS countries and into jurisdictions like Malta where they can do their best in full compliance with EU and OECD rules and regulations.”

Alberto Balatti, Founder and Managing Director of MaltaWay

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What Taxlinked Members Say About Grexit

“I think the Greeks have over-estimated their importance to the Eurozone. The Eurozone will survive even if there is an exit, although somewhat weakened. The Greeks need to appreciate that even after receiving all those billions of dollars their economy is still contracting, so how will additional billions of dollars help the economy climb out of its present predicament?”

Shaukat Murad Dubai-based Alpha Management Limited

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What Taxlinked Members Say About Grexit

“The very sad scenes in Greece with the ordinary people suffering on a daily basis due to the actions of their own politicians and those of the European politicians will probably lead to a Grexit from the Euro and maybe the EU entirely. In the UK, these events underline everything that is wrong with the EU and strengthens the case for a British exit from the EU.” Steven Landes

SH Landes LLP, an accounting and auditing firm in London

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What Taxlinked Members Say About Grexit

“In the whole of Europe, the local pension schemes and how they are affected by the aging of people can form a genuine threat to the system. The situation in Greece is just the forerunner.”

Hendrik Van Duijn of DTS Duijn’s Tax Solutions BV in the Netherlands

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What Taxlinked Members Say About Grexit

“Due to unpredictable situation with Greece, it’s a bit hard to make forecasts on this issue. Since the Eurozone exit procedure is not described, default will not have immediate effect on the other Eurozone countries. But during coming months it will be worse if the problem is not solved in a proper way. My suggestion to clients is to diversify midterm financial assets and instruments within non-euro EU countries such as the UK, Denmark and Sweden.”

Maxim Schvidkiy SHFM Overseas in Sweden

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What Taxlinked Members Say About Grexit

“Obviously, the situation is serious but, financially speaking, the Grexit would not be a problem to the Eurozone. In fact, Greece's GDP is not quite large enough to shake the EU economy. Looking at it in a different manner, the default and consequent withdrawal of Greece may trigger a serious moral hazard that could let the market think that other weaker members such as Portugal, Spain and Italy may be next. Studying the last days’ movements, we could observe that those countries’ bonds plunged, while those for the UK, France and Germany had their yields lowered in a clear movement of flight to quality considering that the ECB may not be there to guarantee Italy, Spain and Portugal's debts.”

Thiago Hupsel

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

“The first economic outcome would consist of an additional loss of confidence in the Euro as an instrument for savings. A longstanding EU member declaring insolvency is a major issue and an indicator of inefficiency of the EU/IMF policy. This will also affect the integrity of OECD policies. Greece leaving the Eurozone will mean further introduction of trade barriers and an occurrence of problems related to acquis.

For Greece, this will lead to most of the businesses being out of conceit with Greek banks that include Hellenic, Piraeus, Alpha and Eurobank. And this is the second economic outcome since in many cases the tax structures have been using the aforementioned banks for easy-to-handle accounts. This would mean a new wave of migration of capital.

Yet, it seems the Greek government and people could be neglecting this and caring more about "social" part of the current situation (i.e. increased taxation and decreased social payments), which is unfortunate.”

Yaroslav Abramov Counsel at Silver Seal Advisers in Kyiv, Ukraine

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What Taxlinked Members Say About Grexit

"An exit by Greece from the Eurozone is going to give rise to a paradoxical situation. If Greece does well after exiting the EU, then others in the Eurozone will think about exploring the option of exiting. If Greece doesn't do well, then obviously it would be bad for the country."

Arun Gupta India’s G D Singla & Co. Chartered Accountants

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

“Honestly, the last 5 years have been difficult for people in Greece. The increase of taxation has been so intense that it came as a shock. GDP has decreased 25-30% and unemployment increased by 27%, more than 50% for young people. These dramatic changes have created the feeling that we should try to find another solution. At the same time, people have lost their faith in the political system.

I strongly believe that Greece cannot be a non-EU country. It would be a disaster. The problem is that Greek people cannot afford any more short-term solutions and we need to find a future goal to strive for. We need solidarity and understanding from other EU-countries because there is no purpose keeping Greece in the Eurozone in such dire straits. In that case, I feel that our people would prefer to try something else even if this were more destructive. I hope that these negotiations end in an agreement that includes a definitive solution for our debt and that arranges our liabilities to our creditors in such a way that it provides space for us to breathe, work, create and pay off.”

Eleftherios Erkekoglou Partner at KSi Greece

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

“The current situation in Greece is completely unusual. People are beginning to panic and this whole situation increases uncertainty. The negotiations between the Greek government and the "institutions" are continuing and everybody hopes they will reach an agreement. I believe it is in the best interest of every part to end this crisis. EU wants to remove uncertainty from the European economic climate in order to achieve higher growth and end any discussion about the Eurozone’s sustainability. ” Panagiotis Statiotis

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

"Greece remaining in EU may be more important for the EU than for Greece.

Losing a member means membership is reversible. If Greece goes back to the drachma, it may take down Euro's near-term stability with it."

Anuj Sharma Director of Abacus Seychelles

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

“On a micro level, I think the Greek crisis will be both a challenge and an opportunity in terms of enforcement of:

1) Financial and legal independence of international subsidiaries of Greek banks. We have many local banks that are owned by Greek capital who are perfectly stable and do not face liquidity problems. This is due to local financial regulations that rigidly enforce capital requirements;

2) Free movement of goods, services, capital, etc. A number of small Greek businesses are incorporating in Bulgaria and managing their affairs from here.”

Iliyan Ivanov Atanassov and Ivanov Law Firm in Bulgaria

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

“Greek governments of the last 5-6 years did not have an indisputable mandate to negotiate with their creditors and, as no precedent for an exit from EU existed, the whole EU and global markets were uneasy with such perspective. Even though the situation has changed, the only constant is the living conditions of the Greek people, which have deteriorated and continue to do so, and the current financial aid on the table is not perceived as being of help by the current government and many Greeks, too.”

Spyros Binias Tax Lawyer with Loyens & Loeff in Luxembourg

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

“I think this situation shows that both the Eurozone and the EU are unstable. If Greece leaves the Eurozone, fears about the collapse of the Eurozone would arise. But, in a financial sense, the proposed exit of Greece from the Eurozone would be positive for both sides. The Eurozone would feel better without any additional ballast. And Greece could devalue its currency so that their products and services would be more attractive in Europe. So I think that if the EU manages to overcome all the negative political effects, all parties involved would win with a Grexit. “

Dmitry Tratas Russia

Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists.

What Taxlinked Members Say About Grexit

“Even though the EU is better prepared than it was in 2012, the financial cost of keeping Greece in the Eurozone is still lower than the cost of Grexit. The main reasons behind the recent escalation of the standoff between Greece and its creditors are political and ideological. The handling of the Greek government's requests will set a precedent for other crisis-ridden Eurozone countries. The stakes are very high because both the creditors' failure to keep the Eurozone intact and Greece's failure to remain in the Eurozone will haunt them for years to come.”

Dimitrios Kyriazis Doctoral Researcher and Tutor at Oxford University

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Taxlinked.net - the online community for lawyers, accountants, trustees and tax specialists. 2015

Your community manager Masha Soboleva, Email and Skype: masha@taxlinked.net