INTRODUCTION: CONVERGENCE AND VARIATIONS

In this chapter, we attempt to draw some lessons from Greece that might be applicable to the Brexit debate and the political economy of the post- Brexit era. The use of the term “exit” to describe a possible walk-out from the Eurozone (or the European Union) was initially coined in the case of Greece. For many years, in the wake of the Greek sovereign debt crisis, Grexit has been usually linked to the (additionally) negative economic and political consequences that an exit from the Eurozone would imply. Some economists, commentators and political analysts saw Grexit as inevitable; a few tried to see the exit as a positive scenario or a radical/simple solution to the Greek predicament. For the majority of the relevant discussions and analyses, the Grexit scenario was mostly seen as the “nuclear option”, to use Krugman’s pessimistic expression (Krugman 2012).

The announcement of a forthcoming UK referendum by David Cameron after the elections in May 2015 automatically boosted a new “exit” term: this time it was Brexit. But in many different respects the UK is not like Greece, so Brexit took different meanings and developed its own political dynamics as a term in public discussions and debates. The UK is a key G7 economy. It is not part of the Eurozone. It has its own currency and an independent central bank. Its international economic and political role is unquestionably very different from that of Greece. The UK did not suffer a severe sovereign debt crisis; on the contrary, after the 2008 global financial meltdown, government borrowing costs reached historically low levels that, in practical terms, increased the fiscal space of the Treasury. The UK’s EU membership referendum took place at a period of relative economic prosperity and, despite the outcome, the future growth prospects in the short to medium term are still positive.