Wednesday, June 13, 2012

Another perspective of Greece-Europe (Naked Capitalism)


Belated European Report and Elite Disconnect

While I’m a bit late in reporting on my trip to Europe (coastal Spain, Portugal, and France), I had thought not to say anything at all, given that I learned vastly less about the economic state of play than I expected. But that in and of itself is a data point of sorts.
One reason I wound up learning so little is I travelled in the most removed manner possible: a cruise. I’m not a fan of cruises (way too regimented) but this was a family holiday. But that means you are not only not staying in local cities, it also means if you do shore tours (which is what we did for the most part), you only see what all our guides called the “touristic” parts. You get bussed around, walked to/through certain sites, and often get some shopping time (after all, Americans must shop, right?)
The clearest evidence of distress came in the few days before the trip. We got an offer from the cruise operator to turn our cruise in in exchange for two later cruises, both in the Eastern Mediterranean, neither originating or terminating in Greece, plus a refund of $6000. This would have been way more days than on the cruise we were set to take. It seemed pretty obvious what was happening: people had cancelled out of cruises that had any stops in Greece, and they were willing to shift people into those cruises at severely discounted prices (presumably, they had wait listed people for our cruise). This thus belies a theory in tonight’s Financial Times, namely that a Euro exit would be bad for the Greek tourism business:
The main export earner, tourism, is unlikely to create much additional revenue despite a cheaper drachma. This sector might suffer a reputational setback from the economic crisis and dissolving social cohesion.
It’s a little late to have these concerns. The media has had plenty of coverage of rising suicides, garbage not being picked up, hospitals and individuals unable to pay for medicines. I’m not sure how much incremental damage would occur with a Euro exit.

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