Preparing for Greece to Exit the EU (Grexit)
This question is partially informed by Tourist SOS… Sunscreen, hat and emergency Grexit preparedness!, which appeared on June 21 and starts and ends as below (emphasis mine):
The U.K. Foreign Office is on the brink of issuing new travel advice to British holidaymakers as Greece looks set for an economic meltdown. London’s officials state that current advice is “under review” even though the final draft is set to be made once the situation becomes clearer. Among the “issues” that tourists may be challenged by is the risk of cash machines shutting down if Greece defaults and the violent protests that could take place if the Radical Left Coalition (SYRIZA) caves in to its international creditors demands.
.Travel agencies are also considering contingency plans ahead of an emergency summit of European leaders in Luxembourg on Monday with tourists arriving with wads of cash in case bailout negotiations fail and banks limit withdrawals.
Background: At the end of this month, June 2015, Greece needs to make an €1.6 billion repayment to the International Monetary Fund. Informed sources tell us that the likelihood of meeting this payment is in doubt. In addition, Greece also owes a mind-numbing €320 billion to other countries, many of which are EU members. This raises the spectre of a flight to quality, which in turn will force Greek banks to temporarily close. By knock-on effect, banks in other EU countries with large resident Greek populations may also close to prevent a run on the Euro.
This means travellers may not be able to access cashpoints (ATMs) in Greece, and possibly surrounding countries, until mid-late July or August. On a wider scale, the Euro will undergo a period of intense volatility and this leaves credit card users vulnerable to being hosed down by Euro emergency exchange rates. This has happened previously in Iceland (2008) and Argentina (2001).
The Daily Mail ran a related item the same day, saying this in part:
Spending money: Cash will be king for travellers to Greece this summer. A currency crisis could result in withdrawals from cashpoints being restricted or the shutters at some banks coming down, albeit temporarily.
How should travellers prepare for a nation-wide closure of banks in Greece, and possibly for a brief period, the EEA in general: bring lots of cash / cancel their trip / travellers cheques / pay for everything up front?
The impulsive answer is to bring along lots of cash so that ATMs are not needed and credit card usage is minimal. But every pickpocket and street hoodlum across Greece is going to know that tourists are loaded with cash, so is this strategy really going to work?
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Images: Herbiour, Jep Gambardella, Alfo Medeiros, Gustavo Fring