What is Grexit?

The Grexit definition refers to the proposal of Greece to withdraw from the eurozone. Being an abbreviation for "Greek exit," the term gained massive popularity during 2012 – 2015 when several key players and some among the general public came up with the demand for leaving the eurozone and moving back from the euro to their own currency – Greek drachma. Proponents of the proposal believed that such an event would be a viable solution to the country’s debt crisis, helping to discourage expensive imports, while dramatically boosting exports and tourism.

Where have you heard about Grexit?

Grexit has been making the headlines since 2012. In 2015, the term got a particular boost in media coverage when Yanis Varoufakis was appointed as Greece’s Minister of Finance to lead negotiations with the country’s creditors during the government debt crisis. However, he failed to reach an agreement with the European troika that includes European Commission, International Monetary Fund and European Central Bank, leading to the 2015 bailout referendum. During that period, the chance of a Grexit in the foreseeable future was widely discussed.

What you need to know about Grexit...

At the time of the concept’s proposal, many believed that bringing back the Greek drachma and leaving the euro along with freedom from policies imposed by the eurozone on its member nations was the best solution to improve Greece's bankrupting economy. Advocates of Grexit explained that devalued drachma could be a way to stimulate foreign investment and attract many tourists from Europe to visit Greece on the cheap rather than paying in more-expensive euros.

Proponents argued that the economy of Greece would suffer in the short term, but could eventually recover quicker without assistance from the International Monetary Fund (IMF) and other eurozone countries.

Meanwhile, many opponents insisted that a return to the drachma would lead to a rough economic transition and lower living standards, which could result in the civil unrest and the collapse of the economic and financial systems.

Since 2015, the economic and financial uncertainty in Greece has improved significantly. As of 2020, the country remains in the eurozone, with help from bailout loans in 2010, 2012 and 2015.

However, Grexit has continued to make headlines occasionally. Even though Greece has implemented austerity measures and continues to attract overseas investments, some still argue that Grexit remains an eventual possibility.