| George Kofinakos | ||||||
A little more than three months after Greece's entry into Emu, the country finds out that eurozone membership does not guarantee immunity from financial and other crises raging in neighbouring countries, such as the former Yugoslav Republic of Macedonia and Turkey. However, membership has helped reduce, if not eliminate, the sensitivity of its bond and equity markets to events in nearby emerging markets.
"It is reasonable to expect that the volume of trade in the wider Balkan area will drop if the recent crisis in FYROM is prolonged. This will be damaging to Greek exports since Greece is the prime economic beneficiary of political normalization in the region," says Christos Avramides, senior emerging markets economist at ABN Amro. "In addition, foreign direct investment by Greek companies in the area is likely to come to a halt and the return from existing projects will be hit."