A former secretary of state has dismissed the idea that the government has plans in place to handle a Greek exit from the eurozone following elections in Greece next week.
Lord Adonis, who was transport secretary in the last Labour government, told the Institute of Travel and Tourism conference in Barbados that if such plans existed we would most likely know about them already.
He said: “It is almost impossible to do any contingency planning in private. That is why European institutions are reluctant to admit to having any contingency plans.”
Lord Adonis told the ITT: “The Greek election is a truly historic moment. The government that comes out of it will determine the survival or collapse [of the euro].”
He said: “If it is possible to maintain Greek membership of the euro, then the euro will stay together and Germany will have to sign increasingly big cheques. If Greece leaves the euro, [the impact] could spread in unpredictable ways.”
If that happens, he said: “A lot of holidays in southern Europe will rapidly become very much cheaper, but whether people want to go to an unstable region is another matter.”
Adonis said: “Britain would not be fundamentally affected by a restructure of the euro. But if the whole structure of the European Union was up for grabs, there would be increasingly loud noises for a referendum on [the UK] coming out.”
He added: “This could easily end with the disintegration of the EU.”
Tui Travel deputy chief executive Johan Ludgren told the conference: “All the forecasters have different views. We are watching Spain and Greece carefully. We have a plan for it, but you can only do so much and when it happens it probably won’t be like the plan anyway.”
He said that if Greece went out of the eurozone: “Greece will become cheaper, but you could have social unrest. You would not want anyone to go through that.”
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