Greece’s parliament approved the bailout package presented by Prime Minister Alexis Tsipras earlier this week, which included some pretty hefty austerity measures. The deal is far worse and more austere than what the nation voted against in the bailout referendum on July 5.
Greece is being forced to chop up and sell €50 billion worth of the country to the private sector so it can recapitalise the battered banking sector and is raising the pension age as well as cutting payouts. Amongst the changes will be the hike in value-added-tax (VAT) for some sectors, meaning businesses will be stung badly.
The VAT rate on hotels is currently 13% but the agreements says the government will raise this to 23%. Now, hotels are starting to recoup these costs immediately — even if tourists already booked and are staying in hotels at a certain rate and bought food and beverages and put it on their tab.
This is according to a BBC journalist:
In June, the head of the association of restaurant chains SEPOA, Thanassis Papanikolaou, warned in the Greek press that the VAT hike would cost thousands of jobs and businesses.
“We have the experience from 2011 when the increase from 13 to 23% in food service brought the shutdown of 4,500 enterprises and the loss of 40,000 jobs,” he said to Greek news outlet Ekathimerini.
This month, Yorgos Dardavillas, the press officer at the Greek Embassy in London, said in an email: “The tourists who are already here and those who are planning to come, will not be affected in any way by the events and will continue to enjoy their holiday in Greece with absolutely no problem.”
This was after Greece implemented restrictions on daily cash withdrawals from ATMs to the tune of €60 (£42.30, $US66.40).