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Published on Wednesday, May 23, 2012

Tourists face shortages if Greece leaves euro, warns economist

Holidaymakers visiting Greece this summer could face food and fuel shortages if the country exits the eurozone, a senior economist warned yesterday.


Dr Brian Clark of Barclays told the bank's annual Travel Forum that it was now "more than likely" that Greece would exit the eurozone, but he said the prospect was "quite frightening".


He said the currency would plummet in value over night, there would be limits on how much money tourists could take in and out of Greece, and there would be limited funds to pay for imports such as fuel and food.


"Will tourists be able to change money, will there be enough fuel for their flight home?" said Clark.


Drawing comparisons with Argentina when it defaulted on its debt in 2001, Clark said it would be a "fairly traumatic experience." He said that in Argentina "there was major civil unrest, people couldn't get money out of the bank, and the country had a non-functioning economy".


"It was not a place you wanted to go on holiday."


However, Greece's tourism industry is attempting to reassure visitors that the country's economic woes won't affect their holidays. In a press release issued this afternoon, the president of the Association of Greek Tourism Enterprises, Dr Andreas Andreadis, said: "We want to encourage international tourism and assure potential tourists that there has never been a better time to come to our country.


"We are trying to change the way our country and its economy is run, however, this is not going to affect the quality of a holiday. Greece remains one of the top destinations in the world and we reassure holidaymakers that this summer remains business as usual."


It said that polls show 80% of the Greek people are in favour of Greece remaining within the eurozone. It also pointed out that the G8 leaders were pleading with Greece to stay.


Greek banks are solvent, he said, and will receive an injection of €18bn from the European Support Fund this week. "Holidaymakers will be able to make any kind of financial transactions as usual in Greece during the 2012 summer.


"Holidaymakers will be able to lock in the best exchange rate since 2008. In fact, hotels and apartments are offering very favorable rates during this time enabling guests to experience a great holiday for reduced prices. In Greek cities and resorts, hotels are offering a wealth of extra benefits such as free extra meals or free children," added Andreadis.


He also pointed out that there was less likelihood of strikes this summer while the country prepares for a second round of national elections.


Nevertheless, the majority of the 300 delegates attending this year's Barclays Travel Forum admitted they were worried about the eurozone crisis - yet 72% admitted they hadn't made any contingency plans for Greece exiting the euro.


However, 62% said that if Greece, Spain, Italy and Portugal abandoned the euro they would expect to see an increase in tourism.


Clark said the best outlook for holidaymakers would be for Greece to stick with the euro but to have an internal devaluation, which would lower prices in hotels and restaurants and generate more income.



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