Selling us what we love is Greece’s only option

matt

 Matt Bain

In the third part of his first-hand series on the Greek economy and its young people, Matt Bain welcomes the news that Greece will make foreign tourists pay their bit towards its huge budget deficit by massively hiking the prices of its major tourist attractions. He found a country failing to make the best of itself and take full advantage of what we love – its food exports and its unrivalled heritage – and says it’s time for the Greeks to come out fighting, and for the rest of us to support them.

Since July’s bailout agreement, much has been said about the black hole of financial oblivion Greece finds itself in, possibly for decades to come.

Ignoring the thorny question as to whether it can ever repay the current debt through punishing austerity, a lesser asked question is this: can the Greeks, in the very long run, hope to stage an economic recovery and continue to run a surplus based on revenue from industry? Can food and tourism pull them out of this awful mess?

It struck me that in the biggest export industry the Greeks have, tourism, which accounts for 25% of export earnings, they are not fighting as hard as they could be, mainly because they have little choice.

Brutal public sector cuts have left many museums closed simply because they do not have the staff. Several popular museums in Thessaloniki were closed all week when I was there last month. That doesn’t put out a good message – that it’s ‘business as usual’ – for the tourists. Rather, the deserted glass buildings stood as an eerie monument to the current national trauma.

“Brussels told us to cut all the civil servants. So of course they wouldn’t cut people running the hospitals so it’s the museums that have to go. I’ve heard that sometimes even the Acropolis is closed”, according to Ioannis Stratakis, a musician from Athens.

The museums that were open were ridiculously cheap. I saw the Archaeological and Byzantine Museums, respectively the greatest collections of their kind in northern Greece, for 8 euros with a combined ticket. The Acropolis, meanwhile, was free (as it always is on the last Sunday of each month).

I was struck by the contrast with the UK, a country with a growing economy that abuses its hapless tourists by milking them for all their worth with absurdly inflated prices of over £20 at attractions like the London Eye and the Tower of London. Meanwhile a country like Greece, badly in need of revenue from this one source it can rely on, is grossly undercharging. They were surely missing a trick here.

With the economy in such dire straits, I wondered how on earth the Greeks could justify free entry to all the thousands of tourists I saw climbing the slopes of the Acropolis, even just for one day of the month. Of course, one must consider affordability to the Greek people but I found myself wondering why they cannot keep it free for them and pump the prices up a little for tourists who, knowing how reliant they are on this industry, I doubt would mind or even notice paying a little more.

So I was delighted to see last week that is exactly what they are going to do.   Price rises – reported to be at least double the present entry fees – will take effect from the beginning of 2016.  While travel agents have complained, the culture ministry says it will put Greece’s charges “on  a par with the rest of Europe” – and about time too.

It isn’t just tourism that the Greeks need to improve- their export food industry could do so much more as well. It is astonishing that it only accounts for 8% of exports, when one considers the huge cultural cache all things Greek command across Europe (and not just by the stereotyped yoghurt and hummus-guzzling north Londonites). We consume vast quantities of Greek-invented foodstuffs yet very little of the money we spend seems to gets back to Greece. For instance, as Roger Bootle pointed out in the Economist last month, whilst Greece exports a lot of olive oil, most of this is processed in Italy; expanding the revenue and employment of that country at the expense of Greece.

Another thing Greece does still make and export is doctors and academics, which are esteemed around the world. Greece has a noble academic tradition that it is desperate to hold onto, and universities are still free to attend (if not, nobody could afford to go). The problem is that this export has little return for the country once these workers leave. Anatasia Chaloulakou, who studies physics, told me that Greece should stick to the things it does best- like research.

“We don’t need to start making a million cars like Germany. We just need the right people and materials and we can do important research and become an important knowledge base in physics, or anything else.”

It is difficult to see, though, how anything other than a hard increase in food-exports and tourism revenue could ever hope to aid the recovery. Greece desperately needs to continue to run the surplus it achieved this year of 1% and stage a recovery or it   will break the strict terms agreed in the latest bailout plan.

With Greece losing market share tourism to other countries like Portugal, it looks as if the current turmoil is affecting people’s decision to go  there. Greece still has and always will have an archaeological heritage unrivalled in the western world, stunning weather and some of the best food in Europe. It needs to start fighting hard and trading in on these assets full steam ahead, if it can ever hope to regain its economic health and national pride.

2015-10-21T10:41:39+00:00 October 20th, 2015|

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