Implications of Greek default not highly sensed in Egypt

The Greek debt crisis has spilled over into many markets, but its effect on the Egyptian economy is still limited, an economic expert here assured.

The Greek default, now standing at about 360 billion euros, represents 180 percent of the Gross National Product (GNP), which Athens cannot afford to pay alone.

The International Monetary Fund (IMF) says Greece would have gotten new financial aid worth 40 billion dollars had it agreed to a bailout proposal.

Ahmed Sebah, an economic expert, said that implications of the Greek default could hardly be sensed in Egypt, whose economy is not that open to Greece's.

The two countries have no trade agreements between them, Sebah said, noting that Greece comes fifth on the list of EU countries investing in Egypt.

But Sebah still pointed to territories where the impact of the Greek crisis was clear. The crisis has sure taken its toll on the Egyptian Exchange (EGX), which suffered whopping losses due to huge sales operations by investors who feared a global collapse of bourses once Greece came out of the euro zone, he explained.

The tourism sector is likely to be affected due to the reduced prices of tourism products given the deteriorating economic situation there, Sebah said, expecting Athens to offer cheap products to attract tourists.

The Greek crisis has also affected the euro exchange rate worldwide, Sebah said, noting that the biggest part of Egypt's foreign trade is with the EU. This means that prices of European exports to Egypt will decline, he said.

He suggested ways out of the Greek crisis by introducing limited fees and taxes on services and commodities provided by the private sector.

The Greek government can also cut off one percent of wages and pensions in order to solve the crisis, Sebah said.

He advised Athens to act to get long-term soft loans from BRICS Development Bank and the Asian Infrastructure Investment Bank.

He also suggested trading parts of the Greek debt through pumping tax-free investments into the Greek markets, adding that Athens should also offer lands allocated for investment projects at reduced prices.

This, Sebah said, will eventually help increase growth rates and reduce unemployment.