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Greek Crisis Impact Felt Across Energy Sector
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It’s probably safe to assume that Greece’s current government has enough on its plate to keep it occupied at the moment, but the impact of its current economic crisis on the energy sector is worth noting.
As Bloomberg noted today, renewable stocks have plummeted this week, dragged down by, among other things, concern about a possible Greek default.
While Greece’s precarious financial standing is nothing new, the country now appears to be at a turning point for its economic future, with a default or possible exit from the euro economy a very real possibility. Banks have been closed, capital controls put in place and a referendum on the further austerity scheduled for July 5.
However, beyond an effect on stock prices, the potential of a Greek default and further distance between Athens and the European community could have a significant effect on the country- and region’s – energy
First and foremost, a default could have a deeply negative effect on foreign investor confidence for the foreseeable future, making the prospect of domestic production all the more elusive. Despite a heavy dependence on imports, Greece’s political leadership has made a concerted effort to promote the idea of local gas reserves in recent years, both as a way to reduce its reliance on foreign producers and provide a new revenue stream.
The push has coincided with a regional effort to be a part of an offshore natural gas rush, led by Israel and Cyprus, and followed by Turkey, Lebanon and Egypt.
However, the push has been less than successful in enticing the necessary foreign partnerships and financial support thanks to the country’s recent struggles. A default will do little to change the situation and will likely prolong the country’s financial isolation. Further, this weakened financial position – or uncertainty about investing in the country – could make it difficult to attract partnerships related to possible transport projects from regional producers like Azerbaijan and Cyprus.
Source: http://www.forbes.com/sites/christophercoats/2015/06/30/greek-crisis-impact-felt-across-energy-sector/
