Published on : Wednesday, May 19, 2021
Rhodes ferry operator Paris Kakas cannot experience yet another loss in terms of summer tourism due to the pandemic if he is ever to repay the millions of euros that he owes: “When the bank comes asking, we say: sorry.”
His is waiting anxiously for the return of tourists, highlighting a vital test for all the banks in Greece, still struggling hard with Europe’s heaviest debt burdens and the legacy of the financial crisis.
Greece is trying hard to recover this summer 2021 to head off a wave of insolvencies among the businesses in tourism, which is by now have come on their knees after experiencing a devastating 2020.
In 2019, Rhodes attracted around 2.4 million visitors. However, in April 2021, the battered car rental services and luxury resorts overgrown with daisies gave the Greek island a look of a ghost town.
To the tourism sector, the Greek central bank accounts that a quarter of loans which estimates for a fifth of the overall economy, are now non-performing.
“Last year, essentially, we stopped paying,” said Kakas, whose ferry company Sea Dreams saw revenue collapse when the coronavirus pandemic brought travel to an abrupt standstill.
While data is inconsistent for loans by the economic sector in October that tourism’s non-performing loan came to 3 billion euros ($3.6 billion).
As per the Bank of Greece, a third of all loans protected under debt moratoria introduced when COVID-19 struck are in the vulnerable accommodation and food services sector.