Athens secures bailout; tourist hotspots faces taxes

Athens secures bailout; tourist hotspots faces taxes
By Daisy Melwani


Greece has secured a bailout deal, but tax hikes are feared to hamper tourism; meanwhile banks remain shut.

Greek tourism operators are concerned proposed new taxes imposed on meals and hotel room sales could impede travellers to the country, or face discounting to offset the higher rates.

As Eurozone leaders struck a deal on a bailout to prevent debt-stricken Greece from crashing out of the euro, it has forced Athens to push through draconian reforms in a matter of days.

After gruelling 17-hour talks, leftist Greek Prime Minister Alexis Tsipras accepted terms set by his distrustful partners.

The deal requires Greek parliament to approve a raft of market-oriented laws by Wednesday as a sign of good faith and face scrutiny by the International Monetary Fund (IMF) for compliance.

Only then will the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to 86 billion euros ($A128.68 billion) its third rescue program in five years.

The sweeping changes are to labour laws, pensions, VAT and taxes, according to the deal document.

Some 25 billion euros of the money in that fund will then be used to recapitalise Greece’s cash-starved banks amid fears they were about to finally run dry and trigger its exit from the single currency.

However, a proposed Greek meal sales tax being considered by European leaders would boost it from the current 13% to 23%, while hotels would see room sales taxes rise from 6.5% to 13% has triggered concern for tourism operators.

According to operators, many would be forced to offset the higher taxes with lower prices to keep their cash-strapped customers, AAP reports.

While the tax hikes will affect all of Greece’s tourism industry, they are expected to hit destinations which cater almost exclusively to Greeks harder than foreign tourist destinations like Athens and islands such as Corfu, Mykonos, Rhodes or Santorini with operators expecting international travellers to bear the burden of the increases.

Meanwhile, Greek banks could remain shut for the next two days as authorities struggle to contain the economic damage from a two-week closure brought about by a cash shortage. Greeks were limited to withdrawing a maximum of 60 euros per account, per day, creating lengthy queues at ATMs.

A new expiration date for the bank holiday would be announced later on Monday, a source from the finance ministry told AFP.

“If there is a deal, banks will reopen very soon, within the week as soon as the ECB (European Central Bank) provides ELA,” Giorgos Stathakis told the BBC.

But, he added, “capital controls will take a few months to be totally removed.”

International travellers do not face any limitations on amounts they are able to withdraw from ATMs, and most operators reportedly accept credit cards.

Image credit: BusinessInsider

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