Brexit: Why Greece needs to introduce legislative measures
(Article by Dr. Georgia Koutsoukou, published in the newspaper “Kathimerini” on August 5, 2019)
The draft Agreement on the Withdrawal of the United Kingdom from the European
Union was endorsed by the UK Government and the European Council on 25
November 2018. However, it has been voted down repeatedly by the UK Parliament.,
leading to a postponement the Withdrawal of the United Kingdom from the European
Union until 31 October 2019.
As the possibility of a no-deal Brexit has never loomed larger than in the current
moment, Greece should consider shielding its vital economic sectors from the
potentially damaging impact of a no-deal Brexit. Unlike other Member States, Greece
has only introduced legislative measures relating to the personal status of UK citizens
following a hard Brexit (Law 4604/2019) but has not passed any law on trade and
economic relationships between Greece and the UK in the event of a hard Brexit.
Therefore, following the example of other Member States Greece should introduce a
transitional regime concerning its economic relationships with the UK for a limited
period after a no-deal Brexit in the following sectors:
(i) Business finance
During the financial crisis, important economic actors (including shipping companies) made
use of credit facilities and loans granted by UK credit institutions due to high borrowing costs
in Greece or made use of investment services offered by UK investment firms. Following a
no-deal Brexit, UK credit institutions will lose their passport. Greece should take action in
this regard, in order to safeguard undisrupted financing for Greek corporations and protect
existing relationships for a transitional period (e.g. up to 24 months) following a no-deal
Brexit. Among other measures, Greece could extend for a transitional period the EU passport
for UK credit institutions.
(ii) Payments
Greece has a strong interest in maintaining trade relations with the UK after a no-deal Brexit.
As a necessary corollary, Greece should take measures in order to counterbalance the loss of
the EU passport by UK payment institutions or e-money institutions. Apart from the general risk of damaging long standing trade relationships, due attention must be paid to possible
disruptions of payments, with emphasis on the settlement risk. For instance, in case of on-
going relationships where a UK payment institution provides services to a customer
(merchant) on a continuous basis, the UK payment service provider may no longer be able to
settle transactions that are processed/cleared prior to the exit day but are actually settled after
the exit day without authorisation by the Greek Competent Authority. Therefore, Greece
should consider transitional measures, in order to ensure safe and fast payments in relation to
the UK, including extension of the EU passport of UK payment institutions or e-money
institutions (e.g for up to 24 months), in order to enable transition.
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