|Athens // Photo by Juan Salmoral via flickr|
UPDATE: June 29, 2015 by Jena Fox
On Saturday, the Greek government announced that all of the country's banks would close for at least ten days (six banking days), with a planned re-opening of Tuesday, July 7. As the New York Times explained, investors have been concerned by the probability that Athens will be unable to meet a $1.8 billion loan repayment to the International Monetary Fund that is due on Tuesday. The Athens Stock Exchange is also closed all week—and as the Associated Press noted, the country's government borrowing rates in bond markets are "taking a pounding" as uncertainty over Greece's economic future and role in both the European Union and the Eurozone spreads.
According to the AP, the two-year bond yield jumped up to nearly 34 percent, 12 percentage points higher than Friday to their worst rate in more than a year. The 10- and 5-year rates also jumped.
Closely watched spreads in Spain and Portugal also rose, though not nearly as much. That suggests that while the prospect of a Greek exit from the euro is unnerving European investors, there is not much concern yet that it could destabilize weaker economies.
While the long-term effect of this move on Greece's hospitality industry remains to be seen, Greece's hotels association has already issued a statement warning that limits on cash withdrawals is already having an impact on the vital tourism industry.
"We wish and hope that all political forces will assume their responsibilities, restoring the country as quickly as possible to normality and stability, which are absolutely essential requirements to protect Greek tourism and to support one more time the national recovery effort of the Greek economy," The Hellenic Chamber of Hotels said in a statement.
Greece is running out of time to reach a debt deal with its international creditors. Athens has until June 30 to repay $1.8 billion to the International Monetary Fund, or the country faces default on the loans, explains USA Today.
“European finance ministers and leaders again resumed talks in Brussels aimed at preventing Greece from defaulting on its loans and exiting the Eurozone,” continues USA Today. If no deal is reached to stop the default, Greece may have to leave the Eurozone and risk its standing in the European Union.
The fear of econimic troubles has increased tensions in the capital city of Athens. Reuters shows a photo of riot police blocking protestors this week.
The current economic state in Greece is affecting the travel industry.
According to QuoteWright, a travel insurance comparison website, tour operators are offering large discounts on trips to Greece, upwards of 50 percent. QuoteWright continues to explain that deep discounts are often a sign of destinations in deep financial trouble.
There are several steps that visitors can take to protect their money and vacation if they plan to travel to Greece in the near future, said QuoteWright.
Book with reputable sources. Meaning, only book with tour operators and airlines that are part of the United States Tour Operators Association (USTOA).
Use credit cards. Federal credit regulations allow travelers to file credit disputes if a service wasn’t provided because of bankruptcy.
Purchase travel insurance that includes “default” protection for the bankruptcy of their tour operator or airline. Make sure to read the policy, as some insurance is time sensitive and coverage may only be available if the traveler buys it within two to three weeks following their first trip payment.