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How a Grexit will affect your holiday

Santorini

Holidaymakers planning a trip to Greece or the Greek Islands this summer will naturally be worried as the prospect of Greece leaving the Eurozone and the impact it may have on their Greek Island holiday.

Almost every news bulletin is full of scare stories about an imminent Grexit from the Euro, the collapse of the Greek banking system and the possibility of soaring inflation.

Even if Greece stays in the Euro, the country is likely to face more austerity measures as international creditors demand a much tighter reign on government spending if Greece is to receive even more bailout cash.

The good news for holidaymakers is that any Greek exit from the euro is unlikely to have major impact on Greek Island holidays in the short term and you shouldn't be worried unduly about travelling to Greece this summer.

Even if Greece does abandon the Euro, it is unlikely to do so before the summer season is over. The technical problem of introducing a new currency, even a return to the drachma will be a process that will take weeks rather than months.

So it is unlikely that a Grexit will hit the pockets of tourists planning to spend Euros in Greece this summer. Such a move could even end up in favour of UK holidaymakers as the Euro could well lose exchange rate ground against the British Pound making a Greek holiday even cheaper.

As package tour operators block-book Greek hotels and apartments at least a year in advance it is unlikely that prices will fall directly as a result of a Greek exit from the Euro but, with other holidaymakers concerned about going to Greece this year, there are likely to be some great discounts for last-minute holidays and the possibility of quieter beach resorts when you arrive.

Holiday giant Thomas Cook says a Greek exit would have little direct impact on holidaymakers as existing contracts with hotel and airlines were signed months ago.

Clearly, this doesn't mean that your Greek Island holiday will be totally unaffected by the economic troubles that Greece is facing at the moment.

There is the prospect of sudden and unannounced bank closures, especially if Greece fails to do a deal with its creditors and sparks a run on bank deposits. The government will do it most to prevent banks collapsing and not only could bank doors stay firmly shut but ATM cash machines will be turned off as well.

The latest advice from the British travel association ABTA is to take cash for holiday spending on not rely on cards for spending money.

Holiday visitors may also be concerned at rising prices as the Greek government considers ways to raise more cash to meet its debt payments. Rises in VAT are widely forecast, especially in many off the Aegean islands that have enjoyed low VAT rates in a bid to both offset the costs of transporting food and other essential to the islands but also to boost tourism.

There will be those who are worried about the potential for social unrest at a turbulent time. Strikes and blockades have been a feature of Greek life for many years but, with a left-wing government in place, strikes have been rare for the past few months.

But already Greece's passenger ferry service is expected to be disrupted on June 30 after the Pan-Hellenic Seamen's Federation announced a 24-hour strike in protest at the alleged violating of labour contracts and claims that the Greek seamen have not been paid.

But the British Foreign and Commonwealth Office, which monitors travel abroad, has no particular concerns at the situation in Greece other than a warning of strikes action, sometimes at short notice, which can cause travel disruption.

Holidaymakers relying on ferries or internal flights to islands are wise to have a plan B in place but that has always been the case in Greece where transport is not always reliable.

The FCO also points out that demonstrations and other social unrest is normally confined to large cities like Athens and Thessaloniki and the Greek Islands normally remain peaceful even when there is social unrest on the mainland.

There is also an increased risk of Greek holiday companies becoming insolvent so, if you book independently you should avoid handing over large sums in advance without insurance protection.

Those travelling with a tour operator will find the company is responsible for finding alternative accommodation or flights if a supplier goes bust.

It makes travel insurance even more essential and it's worth checking the small print to make sure you are covered if your travel company becomes insolvent. It's also a good move to pay in advance with a credit card to increase your chances of a full refund if things go wrong.

One thing is sure. The rising debt crisis has failed to stem the British appetite for Greek Island holidays so far this year. Holidays in Greece shot up 10.5% in the first five months of 2015 and, although there has been a slight falling off on some Greek Islands in June, the outlook continues to look good for the rest of the holiday season.

For some, no doubt, the economic troubles are enough to put them off a holiday in Greece this year, but others will see it as the chance to bag a beach holiday bargain.

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