Travel Q&A: How will Greece’s financial problems affect tourists?

Q What is the anticipated effect of the financial problems in Greece on tourists this summer?

A That’s not an easy question to answer, because negotiations over Greece’s financial fate are continuing, and the outcome will determine how uncomfortable — or not — life there will be.

What has happened to Greece is a bit like what happens to many of us: It borrowed too much money. But here’s the infuriating part: When a new government took power in late 2009, it was discovered that there had been some creative accounting, which made the financial situation look much better than it actually was.

Whether you’re doing this with a country or with your spouse, it’s a bad idea. Although a little spousal deception generally won’t destroy your union, when a country like Greece does it, it does jeopardize a different kind of union — the European Union, of which there are 27 members and of which Greece has been a part since 1981.

Greece has played a big role in destabilizing the union. It has tried to cut its debt by imposing austerity measures, which have led to public outrage, violent rioting and even deaths.

The situation there is unhappy. But Greece needs tourist dollars now more than ever to find its way out from under lest it default on its loans. Tourism is one of its leading industries, and that means you are apt to find bargains.

“Greece is a perfect example of how, until they can show the world

complete stability and control, it’s going to have to generate some substantial value as a way to reel in … vacation dollars,” says Gabe Saglie, senior editor with TravelZoo, a deals site.

TravelZoo recently offered an eight-night vacation package in Greece with air from New York for $1,499 a person, he says. It included two nights in Athens, three in Mykonos and three nights in Santorini, plus ferry service and breakfast. (The deal was posted Jan. 25 and may no longer be available.)

“Is this a package that we’d see if the current situation was much different and much better? Probably not,” he says.

Will you get caught up in the insanity of a riot or a strike? It’s possible, says Nicholas Hadgis, dean of the School of Hospitality Management at Widener University in Chester, Pa.

“Be prepared to be patient when there are random strikes,” he says. “Greece for years — even before the crisis — had random strikes.” Being away from Athens also may be a good idea if you’re looking to bask in the sun without the overlay of tension.

Greece will need to outsmart its competition, Hadgis says, especially to attract Europeans “who just want to get away from the snow and the cold.” Greece has more than 2,000 islands and gorgeous beaches, but it also has competition from the rest of the Mediterranean — Spain also is in a terrible financial situation — for the euros of those who want to shake off the chill, so it might have further incentive to discount.

Those nice, warm beaches need your cold, hard cash. So read the news, and keep your eyes peeled for bargains. In 2012, Greece very well could be the word.

Today’s column comes from Catharine Hamm of the Los Angeles Times. Have a question? Email it to [email protected].

Greece warns bailout rebels of disaster |

Sat Feb 11, 2012 4:07pm EST

ATHENS (Reuters) – Greek Prime Minister Lucas Papademos told lawmakers to back a deeply unpopular EU/IMF rescue in a vote on Sunday or condemn the country to a “vortex” of recession.

He spoke in a televised address to the nation, ahead of Sunday’s vote on 3.3 billion euros ($4.35 billions) in wage, pension and job cuts as the price of a 130-billion-euro bailout from the European Union and International Monetary Fund.

The effort to ease Greece’s huge debt burden has brought thousands into the streets in protest, and there were signs on Saturday of a small rebellion among lawmakers uneasy with the extent of the cuts.

Papademos said parliament had a historic responsibility to back the bill, or face catastrophic consequences if Greece misses a March 20 deadline to service its debt.

“A disorderly default would set the country on a disastrous adventure,” he said. “It would create conditions of uncontrolled economic chaos and social explosion.”

“The country would be drawn into a vortex of recession, instability, unemployment and protracted misery and this would sooner or later lead the country out of the euro.”

Parliament’s finance committee approved the bill on Saturday, and a full vote in the chamber is expected late on Sunday.

The Papademos coalition has a huge majority, which should ensure parliament approves the package needed to secure Greece’s second bailout since 2010.

But the number of dissenters is growing.

About 20 MPs belonging to the two major parties backing Papademos shrugged off threats from party leaders and warned they might reject the bailout. It would take more than 80 rebels to scupper the law.

Six members of the Papademos cabinet have already resigned.


In an interview with the newspaper Imerisia, Deputy Finance Minister Filippos Sachinidis described the catastrophe he believes Greece would suffer if it failed to meet debt repayments of 14.5 billion euros due next month.

“Let’s just ask ourselves what it would mean for the country to lose its banking system, to be cut off from imports of raw materials, pharmaceuticals, fuel, basic foodstuffs and technology,” he said.

On the second day of a 48-hour protest strike, about 50 Communist party activists draped two large banners on the ramparts of the Acropolis on Saturday, reading: “Down with the dictatorship of the monopolies (and the) European Union.”

About 7,000 protesters gathered in Athens, police said, but there was no repeat of the teargas and petrol bombs of Friday.

Members of the conservative New Democracy party, which has a big lead in opinion polls before elections possible in April, are likely to back the deal solidly. Around 10 have threatened not to.

“This is obviously an issue of party discipline,” party leader Antonis Samaras told his lawmakers in parliament, warning anyone who voted ‘No’ “will not be a candidate in the next election.”

Former Socialist Prime Minister George Papandreou, who negotiated the first bailout before his government collapsed in November, acknowledged the pressure.

“I’ve lost friends, my family suffered, I gave up my office, I was insulted, vilified, like no other politician ever was in this country,” he told PASOK’s parliamentary group.

“Still, all that is nothing compared with what our people will suffer if we fail to do the right thing.”

Party discipline is much weaker at PASOK, whose support has dived to 8 percent in the latest opinion from the nearly 44 percent it commanded when Papandreou led it into power in 2009.

The deal includes a bond swap to ease Greece’s debt burden by cutting the real value of private investors’ bond holdings by some 70 percent.


The chief negotiator for private creditors in the debt swap deal, Charles Dallara, urged a ‘Yes’ vote, saying the deadlines allowed “no room for slippage.”

In comments published on Saturday, Dallara, who is managing director of the International Institute of Finance (IIF), said private creditors were committed to a voluntary agreement and that he expected a “very high participation rate.”

“It is important for lawmakers to understand what is at stake,” Dallara told Kathimerini newspaper.

Lawmakers need to approve the deal by Sunday, otherwise the country will not make a February 17 deadline to submit the debt swap offer to its private-sector bondholders, Finance Minister Evangelos Venizelos said on Saturday.

Euro zone finance ministers have told Greece that by then it must also explain how 325 million euros ($430 million) out of this year’s total budget cuts will be achieved before it agrees to the bailout.

Bailout documents released on Friday left blank the amount of the rescue. Venizelos said 15 billion euros more might be needed to rescue the country’s banks, confirming estimates from EU officials.

The EU and IMF have been exasperated by a series of broken promises and weeks of wrangling over the bailout. They will not release the aid without clear commitments by the main party leaders that reforms will be implemented, whoever is in power.

The uncertainty has upset world financial markets, with stocks snapping a five-day winning streak on Friday and the euro tumbling.

The bill, approved by the cabinet on Friday along with hundreds of pages of accompanying documents, sets out reforms including a 22 percent cut in the minimum wage, pension cuts worth 300 million euros this year, as well as health and defense spending cuts.

The government promised to speed up implementation of reforms in the labor, product and services markets, cut spending, and push through a privatization plan. ($1 = 0.7582 euros)

(Writing by David Stamp/Matt Robinson; Editing by Myra MacDonald)