Connecticut is at an advantage because of the kinds of goods state businesses sell overseas.
As Greece seeks a new three-year bailout from other countries in the Eurozone, investors and businesses around the world -- including here in Connecticut -- are keeping an eye on the country's crumbling economy.
Without some sort of deal, the Greek banking system is facing collapse.
Joseph Matthews is a Senior Vice President at Morgan Stanley, and runs the company's Fairfield office. "Connecticut is highly reliant on the insurance and financial services industries, being so close to Wall Street, as well as the companies that are headquartered here in Hartford," he said. "The short-term volatility could very well impact earnings to those types of companies as well as to the personal portfolios of individuals."
Matthews estimates it’s about a 75 percent chance that Greece will end its participation in the euro -- and that could affect the dollar’s value against the euro, and Connecticut’s trade with other European countries.
"Until we know better, people are selling euros and moving money away from Europe," Matthews said. "So what that’s doing is making our goods and services that we -- dollar-based economies, and obviously Connecticut is one -- export into the Eurozone, more expensive. So, that harms companies that are doing business overseas."
Matthews said that while four of Connecticut’s top ten trading partners are Eurozone members -- France, Germany, Great Britain, and the Netherlands -- to a degree, Connecticut is at an advantage because of the kinds of goods state businesses sell overseas.
"Manufacturing on a large-scale basis happens to be the third-largest industry here in the state of Connecticut. Of our exports to foreign countries, 40-plus percent is related to aerospace and aircraft, if not slightly more than that. And fortunately, that tends to be a longer sale cycle, so it may not be a short-term impact, but it could have some impact as to what happens looking beyond that."
Matthews said that the next few days should answer some questions for Connecticut investors and businesses. “Once we get through this, regardless of whether Greece is in or out, having that increased clarity -- that lack of uncertainty should calm things down a bit,” he said.
