Greeks voted overwhelmingly Sunday to reject the bailout package offered by its European Union trading partners, a move that could ultimately force Greece out of the eurozone. For weeks, pundits have been saying this potentially could have a profound affect on the world economy. But, what might it mean – if anything – for Florida
A quick review of Florida’s trade statistics indicates any potential impact would not be felt immediately. Greece is not one of the 50 leading export markets for Florida products, according to Enterprise Florida.
Not surprisingly, Florida’s biggest customers are in Latin America, with Brazil the runaway leader. There also are notable exports to the Pacific Rim (China and Japan) and Middle East (Saudi Arabia and the United Arab Emirates). Still, seven EU nations are among Florida’s 50 biggest trading partners, though one of those, the United Kingdom, does not participate in the euro.
All of which leaves the long-term impact on Florida somewhat murky.
On the plus side, Floridians wanting to travel to Greece may be able to find some bargains. If the “no” vote does in fact force Greece out of the eurozone (a process some have termed “Grexit”), the country will have to reintroduce the drachma or create some new currency. In an effort to boost exports, lower imports and reduce the real cost of debt repayment, the Greeks would likely devalue that currency significantly, giving the dollar strong buying power in the near term.
Since Florida does not export a huge amount to Greece, the revived drachma probably has minimal impact on business while potentially benefitting some individuals.
But, what if Grexit completely destabilizes the euro as a valid currency? There, the scenario gets trickier. An economically challenged Europe could pose a direct problem for those businesses that trade with the six eurozone nations that are among Florida’s top 50 trading partners: Belgium, France, Germany, Italy, Netherlands and Spain. And, though it never gave up the pound, it would be hard to imagine a euro crisis would not affect the U.K. to some degree.
And, then there is the real estate question. A portion of Florida’s real estate recovery has been fueled by foreign investment. Florida Realtors estimate foreign buyers accounted for about 10 percent ($8 billion) of home sales in the 12 months ending in June 2014. Almost a quarter of those sales came from Western Europe. Greater Orlando, Tampa Bay and Greater Miami, in that order, were the top targets of foreign buyers.
Though harder to quantify, European buyers also have been part of a surge in foreign investment in commercial real estate in the Sunshine State.
Given that one major foreign buyer, China, is suffering from some economic instability, a full-blown economic crisis in the EU could have create ripple effects as well.
This one will take a while to play out, but it is a story Floridians should not ignore completely.