Carrefour's Exit from Greece

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“Leaving Greece is rather good news, given the plummeting commercial performance of the company (Carrefour) in the country, but the cost of the exit is high and shows the company's difficulty in the region.”

– Jean-Marie L'Homé, Analyst, Aurel BGC , in June 2012

Adieu!Greece In June 2012, France-based retailer Carrefour SA (Carrefour) exited from Greece after selling its stake to its joint venture partner Greece-based retailer, Marinopoulos SA (Marinopoulos) . With the exit, Carrefour took a non-cash charge of €220 million. Carrefour had operated in the country for 21 years and Greece was its second largest market in Europe in terms of number of stores. According to analysts, economic and political turbulence in the country could also have played a part in Carrefour deciding to quit the market. The company announced, “The sale would allow the joint venture, which also operates in Cyprus, to meet the challenges of Greece's prevailing economic environment.”

In 1981, Greece became the 12th member in the European Union (EU). In 2001, it became the member of eurozone and since then, the euro had become the country's currency . Greece borrowed funds from other EU nations, and several companies and banks made investments in the country. Observers said that debt was used to fund economically unviable projects that included building infrastructure for the Olympics in 2004. Greek's economy found itself in trouble in 2009, impacted by the global economic slowdown combined with a weak domestic economy due to high government spending, low tax income, high debt levels, and high debt-to-GDP ratio among others.

The EU recommended to Greece that it follow stringent austerity measures to extricate itself from the crisis. The measures included reduction in bonuses to public sector employees, increase in the value added tax, a freeze on state pension, and a higher tax on luxury items. In 2010, the EU and the International Monetary Fund (IMF) extended a bailout package to Greece, consisting of bilateral loans of € 80 billion by 15 EU countries and € 30 billion by IMF. These also came with strict austerity measures. Even then, the financial troubles could not be sorted out, and the Prime Minister George Papandreou (Papandreou) resigned. A second bailout package was offered by the EU in 2012. It specified more austerity measures.

Amidst these economic issues, the elections in 2012 played a vital role, in deciding the future of Greece and its position in the eurozone. Political leaders suggested various possible ways for Greece to emerge out of the crisis. The New Democracy Party supported the bailout package from the EU with its severe austerity measures while the Syriza party wanted Greece to exit from the eurozone and maintain its own currency, the value of which would be determined by the country's government....

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