Not too far away from where you’re enjoying your Greek vacation, locals may be protesting and lining up half the night to get paltry amounts of cash out of ATMs. They’re also bracing for tough choices in Sunday’s referendum, a climactic vote in the longstanding debt crisis.
Banks say they have a €1bn cash buffer to see them through this weekend – about €90 a head for each of 11 million Greeks, most of whom are worried sick about their futures. By Monday the European Central Bank will have to step in, or the country will be flat broke.
Almost bankrupt Greece defaulted on a €1.5bn payment to the International Monetary Fund on June 30, after bailout talks in Brussels collapsed a few days earlier. Greece’s current bailout program ran out on the day it defaulted. All week banks have been shut, with limits imposed on cash withdrawals for Greeks. They are supposed to open by July 7, but bar a miracle this seems unlikely. On Sunday the Greek referendum will offer this: Accept the continuing awful austerity of terms in another bailout, or not. Yes or No. Many want an end to the humiliations. If it’s a loud, defiant No, then what? Given that the results of the referendum aren’t legally binding, this may temper future action.
Theoretically the best thing you can do, if you’re travelling in Greece, is keep on spending your euros and keep vacationing. You’re making valuable contributions to the economy. Greece’s tourism industry contributed €45bn to gross domestic product (GDP) in 2014 when indirect spending such as retail purchases are included, according to the Association of Greek Tourist Businesses. If you can find ATMs with cash, you’re not restricted the way Greeks are. Foreign visitors are to some extent buffering the islands from the debt crisis. But it’s getting harder to carry on regardless. The situation isn’t wholesale panic, yet, however stress levels are rising by the day. Monitor the situation closely, check your government’s travel advice and ask Greeks their opinions too. Naturally they’ll want you to stay, but hopefully they’ll be pragmatic enough to answer you honestly.
The Greek Tourism Confederation (SETE) says bookings dropped by 40 per cent after talks stalled in Brussels. It’s not only foreign visitors. Greeks in the diaspora returning to their homeland for summer vacations are also cancelling trips. One woman talked to me on Twitter, saying her family in Greece told her not to come home.
Importers, exporters and manufacturers are grinding to a standstill. Petrol stations and small businesses want cash not cards. Many ATMs in Athens are empty again. Vital medicines are running short. Food supplies in some areas are becoming priorities as people stockpile basics.
Greeks will be asked to decide if they accept the austere conditions of a bailout agreement put by the EU, the ECB and the IMF – although that offer is no longer valid. Leftist Prime Minister Alexis Tsipras urges voters to say No, let’s take a new path. Embattled Greeks are trying to make sense out of a badly translated 34-page document which outlines the proposals for Yes and No.
To say it’s kafkaesque is to downplay it.
Amend legislation on installments to among others exclude those who fail to pay current obligations and introduce a requirement to shorten the duration for those with the capacity to pay earlier and market-based interest rates…”
Got that? Don’t expect most Greeks to get it either.
Ahead of the referendum, politicians are revving up the masses in daily rallies televised in their entirety. Young and old, and even the very old, are taking to the streets. The moods are divided, despondent, or fiery and determined. And peaceful still.
In my second home, the affluent coastal Athens suburb of Glyfada – where the Yes vote looks likely – cafes bustle by day, but retail trade is becoming quieter than usual. Later in the day, one of my friends said, it was deserted. You could almost race a Mercedes down the main street and not hit anybody.
“People were out, having coffee, laughing, but I think they’re either unaware, avoiding the reality or just accepting their fate. By evening it was dead quiet.”
The debt crisis has escalated beyond anyone’s wildest nightmares. Promised tax reforms haven’t materialised. Austerity is pushing people to suicide. The economy stalled again after the Syriza government took office at the end of January. I feel desperately sad for my relatives and friends facing catastrophic upheavals. Some are marching in the political rallies, others are sleepless with anxiety. No one is philosophical about what will come.
Their life savings, homes and/or businesses would devalue by 50 per cent, if Greece exited the euro and remained in the EU with the drachma. The return of the drachma would see a weak currency, dramatic inflation and a frozen economy in the short term. Greece is so financially fragile, I’m not sure it would withstand the transition, even though the absence of the eurozone debt would be a huge advantage.
Maria Verivaki has an extensive blog, Organically Cooked. She went shopping in her Cretan hometown of Hania (where the push for No is strong as you can see from the top pictures) and says: “I found plenty of everything at the supermarket. The shelves are being restocked as they empty. My meat, milk and cheese choices were all Greek today, understandably.”
Maria says don’t believe everything you read.
Like many people not living in highly-urbanised areas, austerity makes her even more resourceful and she has a vegetable garden. She received fruit, veges and eggs from a relative’s garden today. Meanwhile, locally-grown produce at weekly markets continues to be fresh and abundant.
Despite her resourcefulness, Maria is sick of all the turmoil. “We are all at the point where we simply cannot take any more uncertainty.”
As for the referendum, she says: “Rich Greeks are spending millions on ads to get people to vote Yes. Why didn’t they spend money to help Greece so we did not have to get to this point?”
There’s no doubt Greece is between a rock and a hard place. Staying with the euro is seen as modernisation. There are fears that the drachma would mean a return to old ways. According to the IMF, Greece should have a 20-year grace period before making any debt repayments and final payments should not take place until 2055. It would need €10bn to get through the next few months and a further €50bn after that, The Guardian reports.
“European money has been wasted to inefficiently prop up a Greek economy in terminal condition in large part because of European policies… The Greek prime minister and his minister of finance, Yanis Varoufakis, pleaded with their European partners to acknowledge the deeply unfair nature of the situation in which events had placed Greece…. As it is, the unhappy outcome is either that the Greek government will fall, and will be seen to have fallen because Brussels wants it to fall, or it will survive because a majority of Greeks want to defy Brussels. It would be hard to think of a worse pair of alternatives.”
The conservative Greek newspaper Ekathemerini is ballsy and more optimistic:
“Greece has the talent to get out of this. But the problem is that until now, few were interested in joining politics. It is clear that new people must join the fray, and bring a new mentality with them. Those already in politics must change attitude. Losing the security and prosperity that we had as members of the European Union since 1981 – simply because we cannot work together on even the most basic issues of survival – would be not only a tragedy but a crime of epic proportions. This dangerous referendum has allowed us the opportunity to learn who we are. But it also shows up our responsibility for where we are and it demands that we work out where we are headed.”
More on the crisis: Travel tips as Greek debt crisis deepens
* Images of political protests in Hania, Crete, courtesy of Maria Verivaki.