by James Ruggia
Last updated: 1:00 AM ET, Tue February 3, 2015
PHOTO: The Parthenon at night. (Courtesy VisitGreece Facebook)
The implications from last week's election in Greece that made Alexis Tsipras, the new prime minister continue to reverberate.
Tsipras and his party Syriza came to power by campaigning against the austerity program imposed by the so-called "Troika" that bailed out Greece with $270 billion worth of loans. The Troika includes the European Union (EU), the European Central Bank (ECB) and International Monetary Fund (IMF). Though the focus has been on the new government's vow to renegotiate what it calls unsustainable debt payments, Greek tourism is also being reconsidered by the new leaders. While the Greek economy had continued to struggle, its tourism, led by former tourism minister Olga Kefalogianni, had not.
Tsipras has been critical of all-inclusive resorts and has called for a gradual return to what he calls a more traditional tourism that doesn't concentrate the revenue within the confines of the resort, but rather distributes it more broadly with more impact on smaller businesses in local communities. Higher taxes may also be levied against resorts. According to Britain's Daily Mail, the all-inclusive resorts sector is worth some "£1.5billion a year to the Greek economy."
Some members of Greek tourism are calling for a compromise on the all-inclusive controversy that would encourage guests to leave the resorts and patronize local bars and restaurants. American tourists in Greece tend to favor smaller hotels in both the mid- and the upper tier of accommodation. The new government is also considering the establishment of a state operated ferry line.
The government is considering a ban on anymore land deals, especially to non-Greek owners, that would go towards creating the sort of mega resorts that are popular with country's top European markets. It's still not clear what the tax policies towards these resorts will be. As a coalition of left and right wing nativist politicians, the new government may not be clear itself what the tax policy will be as Tsipras, who has spoken of raising taxes on them is from the left, but his new tourism minister, Elena Kountoura, who comes from the right, favors lowering taxes.
Tourism accounts for as much as a fifth of the Greek economy. Though the Greek economy continued to sag even after bailout loans, Greek tourism has been thriving. Late last year UNWTO Secretary-General Taleb Rifai cited the former Greek government's strong support for tourism. International tourists visiting Greece in the first half of 2014 grew by 17 percent thanks to a surge from the same European outbound markets, especially Germany and the U.K. In 2013, international arrivals reached 18 million (up 16 percent) generating $16 billion (up 13 percent).
Reuters reports that Kountoura favors lowering taxes on tourism investment. As for the bigger issue concerning the austerity strategy, while the EU wants Greece to live up to its commitment, unemployment among young Greek workers is hitting 60 percent. While there are those that want Greece to leave the Eurozone, believing the Euro's internal Drachma is a downward drag on the value of the Euro.
The worry for the EU is that anti-European parties, people and politicians around Europe are watching the Greek situation closely and if Greece fractures out of the Eurozone, it could be the first domino of succession with several other countries having strong nativist parties, from both the left and the right.
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