Tourism Alone Can’t Save Greece

bff19a26ed51a720cbc8fea5507bdee6_LThe Neue Zürcher Zeitung, a Swiss German-language daily newspaper, published Gruppe in Zurich, reported in an article on Greek tourism dthat “Greek tourism alone is not enough to solve the problems” of the debt-crushed country.

“Even though Greece receives more and more tourists, the benefit for the domestic market is limited. The average sum of money spent by tourists is ever decreased in the last years,” the story noted.

The Swiss newspaper underlined: “It is possible that this year more than 17 million tourists will visit Greece surpassing the forecasts of the tourism industry. However, a good year of tourism is not enough to slow down the shrinking of Greek economy. Only a week ago the Foundation for Economic & Industrial Research (IOBE, a private, non-profit, public-benefit research organization) predicted that GDP is going to drop by 5 percent. Tourism, the “heavy industry of Greece” contributes to the economy of the country with 16.5 percent”.

Greece, after years of complacency, is reaching out to tourists again to help offset a crushing economic crisis with hoteliers hoping for a rebound after a disappointing 2012 in which visitors stayed away in the aftermath of images of protests, strikes and riots against austerity measures.




  1. Tell me, is this news to you? Have you ever looked at Greece’s national income accounts to get a sense of where its GDP comes from?

  2. read the title of the article.

    83% of the economy is not connected to tourism, meaning there are other industries that can maybe save Greece, but manufacturing is not one of them because of the mathematical impossibility in succeeding in manufacturing and other export driven sectors because of the Euro currency flaws. The EU destroyed Greek manufacturing and exports (ex energy)

  3. This is old news.
    Actually Tourism revenue this year will cover about 60% of our trade deficit and maybe about 18% of our GDP.

  4. The bottom line is Greece is far too expensive. I’m currently touring Spain and Portugal and the things tourists want — booze, food, accommodation and fuel — are much cheaper than rip-off Halkidiki (the place I’m most familiar with in Greece). A double room in Cordoba with wifi, A/C, breakfast and room service is €40 a night. A beer in Madrid was €1.40 in a tapas bar. A shithole in Toroni, Halikidiki, charges €6 for a draught beer. Who are they trying to kid?

  5. Good slide show, quite helpful data breakouts. Agree about the current account but if you get a sense of where Greece’s GDP is generated, you don’t come up with “Tourism alone can’t save Greece” type headlines. But you can have a positive current account supporting GDP growth without any debt relief. At least that’s how normal countries move forward.

  6. Right. Alec, by debt relief we don’t necessarily mean the OSI haircut. It could simply be an extended period to pay down loans at interest rates close to 0%. I think the second European package to Greece is at Euribor+300 bps, so about 0.7% or so or less than 1%. So, there are other ways to do the same job as a haircut without calling it a haircut which gives Germany indigestion.

  7. It gives a lot of us indigestion. But I think there was a huge discussion last fall when it was made clear to all that there are plenty of financial engineering tools to achieve the same result in terms of reducing immediate debt servicing costs without involving the word forgiveness, and thus taboos.

  8. Give that internal devaluation a few more years and they even might feel it in Toroni, unless their main client base are Balkan mafiosos these days in which case all bets are off.

  9. BTW, the right answer is that tourism would save(cover) about 65%+ of the Greek current account deficit.

    Not only the tourism receipts are exceptional this year but also Greek spending(tourism related) abroad is way down making the net receipts much higher (an approximate 40% improvement over last year).

    The other improvement will come from the trade deficit area which stood at 22 Bil. last year and is projected to shrink in the 16-18 Bil. euro range this year.

    The last improvement will come from spending cuts as well as an increase in other services.

    Greece will end up this year with a primary surplus which is a remarkable achievement given the severe austerity and the engineered destruction of its economy to please some pencil pushers in Brussels.

  10. Greece has immense tourist attractions, I think this alone can help them recover, however it is up to the government to take right decisions to pull out maximum benefit from tourism industry.


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