Tuesday 25 October 2016

Greece: How will the Greek crisis affect holidaymakers?


Nick Trend & Pól Ó Conghaile

Published 22/06/2015 | 16:44

Shipwreck beach on Zakynthos, Greece
Shipwreck beach on Zakynthos, Greece

Travel advice: Your questions on carrying cash, using ATMs, bringing credit cards and booking late deals in Greece.

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What is happening?

The dramatic game of brinkmanship over Greece’s debts, reforms, and bailout funds has reached a critical point. The European Central Bank has stopped its emergency funding of Greek Banks. The banks have now shut - probably for at least a week - and capital controls have been introduced to restrict the amount of money which can be withdrawn from ATMs, or taken out of the country.

When might it happen?

Major debt repayments are due by the end of June, but it is possible that a decision may be made even before this. Default won’t necessarily lead to Greece automatically immediately leaving the Euro, but if negotiations with its creditors and the EU do fail this week, the Greek government and banks might be forced to take emergency action.

How will this affect holidaymakers?

In the immediate future, given the restrictions on ATM withdrawals, the biggest problem for visitors to Greece will be access to cash - even though these restrictions will apparently not apply to holders of foreign bank cards, it seems unwise to rely on using ATMs at present.

Should I carry cash?

Yes. It is essential to take enough euro notes with you to cover your needs while on holiday. The Department of Foreign Affairs also advises taking more than one means of payment (cash, credit card, debit card), and enough money to cover emergencies, unforseen circumstances and any unexpected delays.

Currency controls will also limit the amount of Euros you can take in and out of Greece, but normally in such situations you simply declare how much currency you are bringing into the country so that you can take it out again on departure.

Are withdrawals limited to €60 a day?

Only for Greek residents. The latest advice is that holidaymakers will have no problem accessing funds in so much as their own bank or credit card provider will allow.

"However, holidaymakers should be aware of the possibility that banking services – including credit card processing and servicing of ATMs could potentially become limited at short notice," according to the Irish Travel Agents' Association (ITAA).

How can I keep my cash safe?

Travelling with cash is always risky, but you can take security precautions - spreading it between family members, for instance, keeping it in a money belt inside your shirt and using safes and deposit boxes in your holiday destination.

Will my credit card still work?

It should do, but hotels and restaurants may be unwilling to accept card payments and insist on cash. If Greece does leave the Euro (see below), Visa told me that it will adapt to this - it regularly changes, adds or deletes currencies from its systems and that when a country exits a currency, the system for processing payments is still in place while the new currency is added.

“While there are some issues that are outside of Visa's control, we work with all relevant parties to help ensure a swift transition to a new currency with the minimum possible disruption to consumers and retailers,” said a spokesman.

Are other services affected?

"There is ample availability of both fuel and all products and services that ensure a smooth and fun stay for visitors in every city, region and the islands," according to a statement from the Greek government's London press office.

"The tourists who are already here and those who are planning to come will not be affected in any way by the events and will continue to enjoy their holiday in Greece with absolutely no problem," says Minister of Tourism, Elena Kountoura.

What about my travel insurance?

As a rule, you should have travel insurance for any trip.

Before you travel, check that your policy is in date, and that it covers travel disruption and delays that could arise from civil action such as strikes. There is also some possibility, though admittedly unknown at this stage, of Greek hotels and businesses failing this summer.

If you have booked your holiday independently (i.e. not through a licensed and bonded travel agent), then check that your policy includes 'end supplier failure'.

This covers any irrecoverable, unused costs and charges relating to third party companies that become insolvent within your booking, such as accommodation providers, hotels, car hire, ferries, coaches, which you have paid or are contracted to pay.

Would it make my holiday cheaper?

A potential Grexit would certainly make holidays to Greece cheaper in the future, but probably not this summer because hotels, restaurants and tourist shops are likely to insist on being paid in euros in the short term.

Should I book a late deal?

Nervousness about the economic situation does seem to have held back bookings to Greece a little this summer. This means that there are still some good late deals available for peak summer weeks. Personally, given the current crisis I would now wait a few more days before snapping one of these up - and I would certainly be inclined to book a package with a tour operator rather than travel independently. They have a legal duty of care to make sure you are looked after and that you get home safely and conveniently, if problems do suddenly arise. TUI told me recently that it has contingency plans in place.

Is there a risk of civil unrest?

Athens has already seen demonstrations and it is possible that there may be unrest in the event of a Grexit. However, British tourists are unlikely to be targets of resentment, and most holidaymakers go to the islands where the political situation is much more stable, and the local population is acutely aware of their economic dependency on tourism.

For the latest DFA Travel Advice on Greece, click here.

Will Greece now leave the euro?

The situation is uncertain, it is impossible to be sure what will happen next. However, it is looking more likely than ever.

What would happen then?

It would be a time of great turmoil, but the currency switch wouldn’t be instant. If the process does begin, Post Office Travel Money estimates that it would take 18 months for the new drachma to be properly established, and during that time, the Euro would continue to be used as a parallel currency.

NB: This article is being updated to reflect developments.

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