In recent years, Greece has, sadly, become as well-known for its debts (340 billion euros and rising; unemployment at 15%) as its cultural heritage, from the Parthenon atop the Acropolis in the center of Athens to the Minoan palaces of Crete. A year ago, Greece received rescue loans of 110 billion euros from the International Monetary Fund and the European Union bailout, the “biggest bailout in western history” as the Guardian says. But today, the Standards and Poor’s rating agency downgraded Greece’s credit rating from BB to B, putting it at the same creditworthiness at Belarus.
Greece’s Ministry of Finance emphasized that the downgrade — another, down to BB, had just occurred in March — “comes at a time when there have been no new negative developments or decisions since the last rating action by the agency just over a month ago and therefore is not justified.”
Last Friday, the finance ministers from Germany, France, Italy and Spain and from Greece met in Luxembourg along with Olli Rehn, the European monetary affairs commissioner. The German magazine Der Spiegel started speculation about Greece leaving the Eurozone and once again using its own currency, the drachma. European leaders denounced such rumors as just that while George Papandreou, the Greek prime minister, said: “I call upon everyone in Greece and abroad, and especially in the EU, to leave Greece alone to do its job in peace.”
Reports after last Friday’s talks said that Greece will not be able to meet the terms of last year’s bailout. The country’s current rate of borrowing is regarded as “prohibitively high,” at 15.9%. Standards and Poor’s has indicated that Greece’s credit rating could be further lowered, but that it could be maintained at its current level “if Greece’s eurozone partners exempt commercial creditors from comparability of treatment while extending maturities on their official debt.”
According to the New York Times, other analysts and investors have said that they “did not see how Greece could get its debt under control when output was slumping, and there was little sign that efforts to restructure the economy were bearing fruit.” Greece’s own officials have acknowledged that they will most likely not be able to meet fiscal targets set by the International Monetary fund due to an economic slump that is deeper than expected. In 2013, Greece will have to raise as much as 30 billion euros, or $43 billion, from the debt markets.
Tourism — which already accounts for one out of fives jobs and 18% of Greece’s Gross Domestic Product — is being touted by some as the “only way” to save the country in its economic crisis. The Guardian quotes from a speech Papendreou gave to to industry figures:
“Tourism can be the star of development … a model for economic development…The reputation of our country is strengthened when the wealth of our monuments is displayed and when it is associated with myth, history, tradition, Greek produce and Greek diet.”
Unfortunately, due to the austerity measures Greece has had to implement, more than a few archaeological sites and museums are closed or operating under reduced hours, something I noted when I traveled through Greece in March with a group of students from my college. We visited the same cities and sites that I have in previous years; but I noted more stores and businesses were closed and signs for ‘SALE’ were everywhere:
In provincial towns and islands, museums have been closed. For places like Plato’s Academy, the world’s first university, in the heart of Athens, funds have been so scarce that officials have been unable even to afford basic signs. With Greece mired in recession not seen since the reintroduction of democracy in 1974, and Athens’s historic centre so crime-ridden that even its mayor recently conceded that he felt unsafe at night walking its streets, Papandreou’s targets, then, might seem a bit of a pipe dream.
But the US-born premier is not without ambition. Greece, he says, should aim to become one of the “10 best” destinations in the world. To this end, he has gone out of his way to improve the country’s image abroad.
Last year, the government banished visa requirements for non–EU citizens, waived landing and take-off fees for aircraft at airports nationwide and took steps to facilitate foreign investment in a sector that, like so many others, has been afflicted by corruption, cronyism and lack of competitiveness – the very ills that helped bring Greece to its knees. Last week, Papandreou announced plans to cut the price of costly ferry tickets.
Some places like the Ionian island Zakynthos saw a 200% increase in the number of visitors over East, as people have been avoiding Tunisia and Egypt due to the political unrest there. The lifting of visa restrictions also means that many more travelers from neighboring Turkey, Russia, China and India are expected.
If I had the funds and if my son Charlie, who’s on the moderate to severe end of the autism spectrum, could travel in an airplane (it’s about 13 hours non-stop from the east coast to Athens), we’d have a summer vacation booked. I’ve taken students three times and there’s much, much more to Greece than the Acropolis (which must be seen, don’t get me wrong): Of course there are the beaches and the islands, but I also really recommend a visit to northern Greece, to see Macedonia, a jaw-dropping museum in Pella where you can see the tomb of Philip II of Macedonia, and beautiful Thessaloniki. Charlie isn’t able to travel by airplane at all right now and would probably be overwhelmed (an understatement) to find himself in a completely different environment. But someday, perhaps — by which time, the debt crisis in Greece will have, one hopes, lightened.
Photo of the Propylaon, the entranceway to the Acropolis in Athens, by the author.