Thursday, July 16, 2015

Finance update for travelers to Greece - July 16, 2015

The Parthenon temple on the Athenian Acropolis in Athens GreeceThe Greek Parliament has passed the first hurdle, passing legislation, getting 229 out of 300 possible votes for the austerity measures, as required under the €96 billion bailout plan which implements the start of the bailout.

But, Greek people at work, at home, and travelers enjoying the great locales, beaches, museums and historic sights the Banks will remain closed for now, and cash will be hard to come by within Greece.

The IMF (International Monetary Fund), currently owed about €32 billion by Greece is calling for significant debt restructuring in the final deal for the €96 billion bailout plan, which is essential to the success of the bailout, in my opinion, or the Greek Eurozone crisis will be back in short order. I ask if the debt Greece has now isn't sustainable, how is adding substantially to that debt and then going down the same financial road going to arrive at a different outcome. The answer is ... it can't and it isn't.

Next up, Greece has to get a €2 billion "bridge loan" by early next week to clear some debt (yep, debt to clear debt which kind of boggles the mind) or the banks aren't going to be able to be opened any time soon.

Then the final negotiations will have to commence, and they could easily take weeks and could be far more difficult to conclude, especially if Prime Minister Alexis Tsipras can't hold his government together. Many in Greece, including members of its Parliament, are angry at the deal at this point, which is seriously complicating the situation. There is about to be a major shake-up of the Greek government as several high ranking government ministers voted against the measures just passed.

So, for travelers, right now, it's status quo. The banks remain closed. It's anyone's guess when they will reopen. The Euro in a traveler's pocket is still the coin of realm and the only sure way to be able to pay one's bills in Greece anywhere. For the time being credit cards are being accepted at chain hotels and hotels with financial resources outside Greece with which to obtain cash and restaurants with similar resources, but they are slowly dwindling in number.

It's now a race against time for Greek businesses and the Greek people. It's unknown whether their runner in this financial race, the Greek government, has the stamina to finish the race, and do it fast enough to pull Greece into position not to fall down and miss the finish line again.

1 comment:

Pat said...

This saga feels like a soap opera except that it's real.

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