08/09/2015

By Alex Christodoulou, Co-founder of Weengs

My colleague and I left Greece earlier this year in February. At the time, it wasn’t a move primarily motivated by the impending crisis. The market we were aiming for simply didn’t exist in Greece, so we chose to set up camp in London and expand from there instead.

But with mounting debts and an idealistic government at home, we were always concerned by where the situation might be heading — concerns that were not misplaced it seems. As the months rolled on, it became clear that launching our business at home would have been fraught with difficulties. With the introduction of capital controls, start-ups have become unable to pay any partners or suppliers based outside the country. This particularly affects those employing critical cloud services to keep their operations going. The companies that managed to survive the last 5 years of the crisis recently reached their limits, trying to survive by temporarily suspending employees, cutting down operations and so on. Then there’s of course the issue of customers — those dependent on the Greek market have been hit hard, although those with international customers seem to be riding out the storm.

The Greek government promised its people things it could never deliver, something many Grecians were conscious of. We also knew the government would do its utmost to negotiate to prove to its voters that it fights for them. What we didn't expect, however, was to see the situation continue for almost half a year, with the government spending all available state money in the process, ultimately leading to the banks closing. The irony is that in so bitterly fighting against austerity measures, we ended up with five times more stringent cuts and an economy ready to collapse.

What was also concerning was that, for the first time in its history, an exit from the Eurozone was put on table in protest of the cuts demanded by the bailout. But the austerity measures were something that Greece couldn’t avoid forever, and leaving would not have helped Greece out of its crisis. What is needed is brave reforms that will make the country competitive, and it's concerning that during all these months, the government debated only about if we would accept the funds from the EU, not about how these funds should be used.

As we move forward, Greek entrepreneurs will have two main concerns. First, how can a business go on receiving investments and plan its growth in a country where even the basic infrastructure like banks is in doubt? Companies are thinking of ways to move their legal entities out of Greece in order to secure their operations. Second, and maybe most importantly, many highly-skilled Greeks have lost their morale, and are thinking of moving away from the country to looking for healthy markets where they could capitalise their skills.

But perhaps more importantly, with all these issues, Greece is facing a dramatic loss of talent — or 'brain drain'. Businesses are starting to relocate — skilled professionals in the finance industry were the first to go and now we're seeing tech workers contemplating a mass exodus. And where once, most would have returned richer for the experience, we’re now seeing a growing trend of entrepreneurs planning permanent moves.

Only time will tell whether new leadership and increased confidence in Greece staying in the Eurozone can alleviate the issues and fears that are causing the great loss of start-ups. For now, Greek entrepreneurs may well be better off spreading their wings further afield.