A new survey of UK business leaders reveals that three in four IoD members think it’s likely Greece will be forced to leave the European single currency within the next twelve months, against only 2% who think it is very unlikely.
The most probable outcome of “Grexit”, IoD members say, is a messy default which negatively affects financial markets and creates pressure on other Euro members. This outcome was considered likely by nearly two-thirds of the business leaders surveyed, while 45% also think there was a risk of widespread bank runs in other southern European countries. Longer-term, 45% of members say there is a good chance “Grexit” will be followed by other countries leaving the Euro.
While the direct exposure of IoD members to Greece is limited, with 77% having no business interests in the country, nearly half think that a Greek exit from the Eurozone would have a negative impact on the UK.
Full tables of the survey results are below.
Commenting on the results, Simon Walker, Director General of the Institute of Directors, said:
“British businesses are nervous about the potential knock-on effects of “Grexit” on the UK economy. They have reduced their direct exposure to Greece in recent years, but are worried that a messy divorce from the single currency would shake markets across the continent and destabilise the already fragile economies of other southern European countries. IoD members do not expect the chaotic situation in Greece they see on the evening news to end anytime soon.
“There is a heated debate going on about whether it would be better for the Greek people if they left the Euro, but it’s clear that their decision at the referendum on Sunday has significant implications for the whole of Europe.”
Full survey results
The IoD received responses from 847 members between 24th June and 3rd July 2015.
Q. To what extent do you believe Greece’s withdrawal from the euro[zone] is likely or unlikely over the next twelve months?
|
Very likely
|
221
|
26%
|
|
Somewhat likely
|
401
|
47%
|
|
Neither likely nor unlikely
|
43
|
5%
|
|
Somewhat unlikely
|
154
|
18%
|
|
Very unlikely
|
15
|
2%
|
|
Don’t know
|
13
|
2%
|
|
|
Total
|
847
|
Q. How much of an impact – direct or indirect – do you think a ‘Grexit’ would have on the UK economy?
|
Strong negative impact
|
20
|
2%
|
|
Somewhat negative impact
|
389
|
46%
|
|
Neither negative nor positive
|
325
|
38%
|
|
Somewhat positive impact
|
80
|
9%
|
|
Strong positive impact
|
6
|
1%
|
|
Don’t know
|
27
|
3%
|
|
|
Total
|
847
|
Q. What do you consider some of the likely outcomes of a ‘Grexit’ to be?
|
A messy default and exit which negatively affects financial markets and leads to pressure on other Euro members
|
529
|
62%
|
|
A Greek default within the euro, but with muted effects on the wider Eurozone
|
323
|
38%
|
|
Greek economic recovery based on a competitive revaluation and exports
|
223
|
26%
|
|
The imposition of heavy capital controls by the Greek government
|
406
|
48%
|
|
More widespread runs on southern European banks
|
381
|
45%
|
|
The remaining Eurozone becomes stronger and more integrated in the longer term
|
196
|
23%
|
|
Other
|
31
|
4%
|
|
Don’t know
|
22
|
3%
|
|
|
Total
|
847
|
Q. To what extent do you consider that a ‘Grexit’ will ultimately be followed by other countries leaving the euro?
|
Very likely
|
45
|
5%
|
|
Somewhat likely
|
341
|
40%
|
|
Neither likely nor unlikely
|
138
|
16%
|
|
Somewhat unlikely
|
232
|
27%
|
|
Very unlikely
|
75
|
9%
|
|
Don’t know
|
16
|
2%
|
|
|
Total
|
847
|
Q. What kind of exposure does your business have to Greece?
|
Clients in Greece
|
79
|
9%
|
|
Clients in other countries with operations in Greece
|
39
|
5%
|
|
Subsidiary or joint venture operation in Greece
|
12
|
1%
|
|
Direct investment in Greek enterprises
|
3
|
< 1%
|
|
Contracts with Greek enterprises
|
20
|
2%
|
|
Assets in Greece
|
6
|
1%
|
|
Imports from Greece
|
6
|
1%
|
|
Staff in Greece
|
12
|
1%
|
|
Other
|
21
|
2%
|
|
Don’t know
|
54
|
6%
|
|
None of the above
|
654
|
77%
|
|
|
Total
|
847
|