dwdvagamundo

To answer the original question, short-term, it should help those travelling to Greece as the exchange rate of the drachman is likely to be quite a bit lower relatively speaking than the Euro and lots of people will be scared away leaving more room and possibly lower prices for the intrepid. I doubt prices will go up, at least in the short term-it'd like Argentina when it stopped pegging the peso to the dollar.

Long term, no effect on tourists.

So if I were planning a trip to Greece, I might delay to see if the "Grexit" really takes place (so that exchange rates might lower) but otherwise, I'd go.

flanneruk

"That may solve one problem, but potentially creates another i.e. how one safeguards possibly several €000 over a 2-3 week trip."

The way we've dealt with the problem for centuries: keep the money hidden, be sparing in your trust of others - but remember that at least 99% of people anywhere (and 99.99999% of Greeks) have no interest in robbing you.

Back before all this plastic stuff, didn't we all hitch round Greece with £50 (the most we could take out of the country) in our socks? And find it (or we) were threatened ONLY by the dopehead Westerners we shared youth hostel roofs with.

The Greeks are shameless about robbing us, as depersonalised EU taxpayers, of billions. But they're far too honest to tolerate anyone stealing real cash from real people.

Incidentally, no-one's offered a decent reason so far this year for believing a Grexit - or a serious likelihood of one soon - stops foreign credit cards from working with conventional Greek merchants. Clearly, ATMs can run out of money, and I can see why in a Grexit the Hotel Splendidikos will prefer bills to be paid in cash € (so it can pay its staff.) But surely it's still going to be prepared to accept € card payments?

The credit card crunch (surely?) is for Greeks abroad trying to use Visas issued by Greek banks?

twk

<<Incidentally, no-one's offered a decent reason so far this year for believing a Grexit - or a serious likelihood of one soon - stops foreign credit cards from working with conventional Greek merchants. Clearly, ATMs can run out of money, and I can see why in a Grexit the Hotel Splendidikos will prefer bills to be paid in cash € (so it can pay its staff.) But surely it's still going to be prepared to accept € card payments?>>

You would think so, but it's hard to say for sure. If you're a merchant in the habit of taking cards, would the fact that you can't immediately access funds cause you to refuse business? I tend to think it might be more of a problem at restaurants, or other places that depend upon supplies of goods to do their business (hotels do need to purchase a few things, but it's a smaller part of their business). On the other hand, if banks are closed, who is going to process those payments? I don't take cards in my business, so I really don't know how that would work.

If I were going to Greece this week, I think I might call my hotel and see if they would take my payment info and process the transaction now, so that I knew it was going through before actually heading there.

sandralist

The most persuasive argument I heard today for taking cash to Greece was because Greeks could use some cash since the EU has failed them! So be a great guest, bring lots of cash, and buy a lot.

I follow a number of twitter feeds out of Greece and several business people are reporting that all electronic transactions -- credit card payments, e-banking, etc -- are happening without a hitch. Most ATMs have cash, and a great many travel packages are offering cash exchange to their clients (but all have said that so far no tourist has taken them up on the offer).

Of all the criticisms I have heard of the new Greek government elected this year, the only one that gets any traction with me is that they underestimated how viciously they would be treated by a core group of European policiymakers who want economic policy in Europe to be their way or else. Greece is not the first country to be blackmailed and threatened with bank collapse unless it goes along with imposed policies.

So the between now and the referendum, we get to see just how cruel the leadership of the European Union is going to be when it comes to collapsing everyday economic function in Greece. They are out for blood against this government, so I no longer expect anything --- ummm -- "helpful" to anybody from them.

annhig

Incidentally, no-one's offered a decent reason so far this year for believing a Grexit - or a serious likelihood of one soon - stops foreign credit cards from working with conventional Greek merchants.>>

except that merchants will probably not want to pay commission to the issuing banks, and so may refuse to take non-Greek issued cards, or any cards at all, as happened to us in Germany this last weekend.

This is one time where a pre-paid package holiday might just be worth considering.

HelenG

I have also been following the events happening in Greece as I have planned a September trip. Even though a little nervous, we haven't even given thought to cancelling. Any daily updates from fodorite visitors or residents would be so helpful as far as ease of credit card use (non-greek issued) and ATMs.

flanneruk

<i>On the other hand, if banks are closed, who is going to process those payments? </i>

The banks aren't closed: how do you think the ATMs are kept running and stuffed with at least some cash? Their branches are closed, and some activities suspended. But just as electronic payment carries on, and central trading desks do incomprehensible things with debt swaps, even when branches are closed, right now Greek banks continue to operate many activities close to normally.

As I understand it, the reason for the UK government warning is precautionary, not a prediction about an inevitable consequence of a Grexit or its precursors. And some of the circumstances the "take cash" warning is designed to cover <b> have already taken place </b>

First, the bank holiday means many traders probably already prefer cash to cards, because having cash makes it easier to keep running the business.

Second, Greece (the government) is now in default to the IMF. This has the potential to trigger individual banks going into quite separate defaults with their creditors. If one does, at the very least merchants will begin to be wary of offering credit that necessitates trusting a bank. My card might be issued by Citibank and say it's a Visa: but the merchant gets his payment from a Greek bank, and even if his bank's not bust, he might understandably worry that his will be next.

Whatever happens in the big Greek debt picture over the next few weeks, merchants are going to remain nervous. Accepting cash dollars, euros, pounds or kronor might sound safer - but to a nervous merchant, how can you check a pound or dollar note's not a forgery?

Euros, cash, in modest notes, are what they're most likely to trust - even, at least for a while, in a Greece where the official currency is the Nea Drachma.

odie1

Just some other on the scene update, we are in Naxos and we have encountered 3 merchants (1 in Chora the other two in Chalki) who wouldn't take credit cards due to "the problem with the banks right now." In exchange for cash they offered a 10% discount.
We have encountered only one ATM problem but wasn't too sure why it wasn't working.

sandralist

Bloomberg produces the best analysis of the Greek exit I have read in 5 months, written by Clive Crook, who has a long and distinguished career as a financial journalist:

http://www.bloombergview.com/article...eece-with-exit

Pepper_von_snoot

The above article from Blomberg doesn't make sense because Jean-Claude Juncker doesn't want a Greek exit and is promoting a YES vote.

Paul Krugman, the Nobel Laureate in Economics, thinks this is because Europe wants to control Greece and pull the plug on the economy if it so chooses.

A NO vote could mean a return to the drachma, and a devaluation of the currency in order to make exports cheaper to foreign consumers.

A devalued currency could also spur more tourism in the country.

Thin

dwdvagamundo

Ian Talley in this morning's Wall Street Journal says that many economists (he quotes Joseph Stiglitz, former chief economist for the World Bank and Ajai Chopra, chief architect of the IMF bailout of Ireland) believe that the IMF--by not asking for an immediate debt restructuring in 2010 and by making rosy projections for growth in Greece's economy--helped lead to the current situation.

The projection was that Greece's economy would begin to grow in 2012; instead, it shrank by 25% from 2010 to 2014.

These two actions were taken at the behest of the United States and Europe, the largest shareholders of the IMF, and against the warnings of many within the IMF.

Today, however, looks more encouraging for the Eurozone. We'll see.

smihmikolaj

Greece have their own mentality. I read few days ago about social pacages in Greece. They getting social even for washing hands in my oppinion, main point of economic revolution in Greece is changing mentality of people.

dwdvagamundo

Much of the neutral commentary I've seen in since the vote is to the effect that Greece chose the best of two bad solutions: they could have voted "Yes" and then endured almost unending austerity in an attempt to pay off or pay down debt OR they could vote "No", endure through some immediate economic pain, and then hopefully come out with a stronger economy in the long run after the EU and IMF either accept some kind of debt restructuring or Greece reverts to the drachma.

The wild cards in the deck are Russia and China; neither has an exactly roaring economy right now, but there are reasons both--particularly Russia--would want to help Greece out of its current illiquid situation. Their presence might draw the US government more directly into this game.