Vicky, an intrepid jet-setter from Santa Monica, California, planned a trip to Greece with a friend over a year ago and now is feeling a little uncertain about the trip. “I’ve packed a suitcase of cash,” she said, “and can just hope for the best.” Her vacation that includes side trips to Mykonos and Santorini was paid in advance so that’s no problem. Vicky isn’t alone. But according to a report on CNN television yesterday from a reporter based in Athens, “Americans are fine, the weather’s great and the ATMs are working.” And if you watch the accompanying video it’s all good. But read on.
However, today’s Wall Street Journal on line had gloomy news saying, “If Greece fails to pay the International Monetary Fund a $1.7 billion debt coming due at the close of business Tuesday—around 6 p.m. EDT—the country will immediately be in arrears to the fund, an event normally known in the financial world as a “default.”
“The default, which Greece has already warned will happen, would be the first by an advanced economy in the fund’s seven-decade history, as well as the largest single overdue payment. It would also put the new Athens government on a par with a small group of mostly conflict-ravaged debtors that have stiffed the IMF—a short list that includes Afghanistan’s Taliban and coup-stricken Haiti. Zimbabwe strongmanRobert Mugabe was the last major default to the emergency lender, in 2001.”
This was deemed necessary to combat the cash shortage after negotiations between Greece and the troica (the European lenders and the IMF) broke down. The banks will remain closed until at least July 6, 2015 to prevent people from withdrawing their money in panic.
Negotiations between the Greek government and the troica broke down on June 27, 2015 and by the evening of the 28th the ATMs were been emptied of cash throughout Greece. On the 29th the Greek government imposed capital controls. through a series of measures that limit the flow of money throughout the country. These include a limit on the amount of money each person is allowed to withdraw, which is currently set at 60 Euro per day. The ATMs throughout Greece began dispersing the 60 Euro on June 29.
Cards issued outside Greece are not subject to the 60 Euro withdrawal limit at the ATM. Long lines in ATMs have been thoroughly documented in the media, as have the long lines at the gas stations, but other than that Greece remains calm and besides cash, no shortage of goods has been reported by the evening of June 29.
Credit Card and web banking transactions are allowed without limits within the country only. No other banking transaction is allowed. There is no limit on credit cards transactions at sale points, but reports in Greek media indicate that most small businesses are reluctant to accept credit cards (source.)
Large peaceful protest gatherings have taken place – with more to come – in Syntagma square in anticipation of the upcoming referendum vote where Greeks are called to vote for or against a draft proposal by the lenders. The current Greek government is campaigning against the proposal. Other Eurozone countries have indicated that the referendum result will be perceived as a vote for or against the Euro.
Media reports indicate that Greece will be unable to pay the 1.6 billion due to the IMF on July 1st, something that could lead to Greece formally defaulting on its debts by the end of July.
According to Greek Landscapes today, June 29, an online site that advises people about travel to Greece, “It’s even more imperative now that travelers follow the news and stay alert to new developments. According to this article travelers should bring along extra cash and different forms of payment in case banks close and ATMs cease functioning.”
The Australian and British government issued mild travel advice for those who plan to travel to Greece in summer 2015, generally advising that travelers should carry extra cash. The Australian advice is the most comprehensive indicating:
“Daily ATM withdrawal limits do not currently apply to most major foreign debit/credit cards. Make sure you have more than one means of payment with you (cash, debit cards, credit cards), and make sure you have enough money to cover emergencies and any unexpected delays. Petrol stations may not accept credit card payments.
Protests and demonstrations can occur in cities across Greece with little warning. Australians are advised to avoid all protests and demonstrations as they may turn violent. Areas in Athens that have been affected by demonstrations and riots include Syntagma Square, Monastiraki, Omonia and Exarchia.
Strikes affecting air, sea and rail transport, as well as taxi services happen regularly in Greece. If you are affected by transport disruptions, you should monitor the media, maintain contact with your airline, your travel agent and your insurer, and be prepared to change your travel plans.”
The German, Dutch, and the Belgian governments issued similar advice that travelers should have extra cash on hand if they visit Greece.
So if you are planning a trip to Greece, heed the advice and make sure you have plenty of cash, travelers cheques are recommended, and keep your chin up, it is a fantastic place to visit, especially the Greek Isles with its gorgeous beaches, warm weather and bustling tavernas.