Greece awaits troika's decision

Greece awaits troika's decision

Greece and its population are at the mercy of heads of international finance. But the 'crisis' has little discernable impact on holidaymakers, reports Ian Taylor

Representatives of the European Central Bank, the European Commission and International Monetary Fund – ‘the troika’ – flew into Athens last week to review the Greek government’s compliance with austerity demands.

They will decide in September whether to release the next phase of bail-out funds. The troika could decide Greece has failed to meet its commitments to crippling measures for an economy already forecast to decline 7% this year.

Youth unemployment is 50% and many in work have suffered 30% wage cuts. Pensions will bear the brunt of the next round of measures in a country where teachers take second jobs to make ends meet.

An unnamed troika official was quoted as saying: “Greece is hugely off track.” So at any time Greece could be back in the news in a way that might discourage visitors.

Images of protests in Athens dominated news broadcasts last year and in 2010, and the word ‘crisis’ is never far from any media mention of Greece.

On Monday, newspapers reported Bank of Greece figures showing tourist numbers down 11% year on year to May under the headline: “Tourists shun Greece.” In fact, arrivals have been down by more than this at times; an 11% shortfall would not be bad in the current situation. And all the signs say bookings have been improving since mid-June.

As far as tourists are concerned, the key fact is Greece is open and welcoming. The transport infrastructure – airports, taxis, ferries, buses – is intact and functioning better than at most times in the past. In Athens and on the islands, hotels, restaurants, bars, museums and historic sites are open.

Hotel prices are at their lowest in five years, with rooms available in peak season at rates previously unthinkable. Food and drink are relatively cheap – a Greek coffee costs €1.60, a bottle of water in a cafe 60c – and the exchange rate has improved in UK visitors’ favour.

Germans have stayed away in large numbers, meaning the UK is poised to regain its position as the biggest international market to Greece. The new tourism minister has pledged to make UK promotion her first priority.

It’s reasonable to ask whether the welcome to visitors would be in jeopardy should the troika freeze payments. Clearly, this could hit businesses and investment in infrastructure, but the welcome will surely remain alongside the beaches, food and heritage.

On the islands of Santorini, Paros and Idhra and in the capital Athens I found little evidence of recession – let alone deep crisis – that would impact on visitors.

There are difficulties, but the crisis up to now has three aspects, two of which affect tourism.

First, destinations, hoteliers, restaurants and bars suffer from a downturn in domestic spending. Second, they suffer from a downturn affecting some foreign markets more than others, in particular Spain and Italy.

Nikos Balos, director of hotel management company Hotel Brain, which runs properties on Santorini, Crete and Mykonos, said: “I don’t worry about the crisis in Greece. I fear the crisis in other countries. Italian reservations are down 45%.”

The third aspect is the most serious: the impact on the lives of most Greeks. Dimitris Petropoulos, owner of inbound agency Erkyna Travel on Paros, said: “For us it is hard. People lose their homes. If you borrowed €100,000 to buy a €200,000 property, it may be worth €50,000 now. You still pay the loan.”

In Athens, a taxi driver reported takings down 30%, saying: “There you feel the crisis.”

Alexia Panagiotopoulou, sales and marketing director of the Athens Convention Bureau, said: “The shopping streets are quiet. People lose their power to buy. The middle class is vanishing.”

Panagiotopoulou has a good job but survives as a single woman with the support of her parents. Her colleague Kalliopi Andriopoulou manages only because her household has two salaries.

There is widespread anxiety about the troika. Panagiotopoulou said: “People worry because if the budget is not funded they will not be paid, but if the budget is approved it will mean higher taxes.” This is the real problem in Greece: one for visitors to sympathise with, but not one to spoil their stay.


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