Preparing for euro crisis: ATMs on lockdown?

Reuters has filed a report claiming that the European Union is making preparations to contain the effects of panic if Greece was to exit from the euro. Among the measures they are considering imposing are a limit on the amount of money that can be withdrawn from cashpoints, imposing border checks, and introducing controls to stop a flight of capital from the country.

So is a crisis imminent, and what does it mean for holidaymakers?

Contingency

The report itself has stressed that officials aren't considering these likely scenarios - they are simply matters that have been up for discussion when considering contingency planning for a Greek exit.

The officials also insisted that the fact they are having these discussions doesn't mean they think there is a strong likelihood of Greece leaving the euro, but that they have to consider all eventualities and plan for them.


The anonymous source told Reuters: "Contingency planning is underway for a scenario under which Greece leaves. Limited cash withdrawals from ATMs and limited movement of capital have been considered and analysed." However, the Central Bank of Greece denied that any such discussions had been conducted.

Likely exit?

It is hardly surprising that people are talking this way, as the eurozone is facing a number of crises from several angles. The Spanish banking crisis was just the latest, and the Greek election waits in the wings - where a victory for anti-austerity groups could make a Greek exit far more likely.

Ted Scott, Global Strategy Director, F&C explains: "The bailout of the Spanish banks is yet another policy announcement that does little more than buy time and remove short-term systemic risk, perhaps until Sunday. A 'positive' Greek election result will buy more time but eventually the politicians will have to choose the path between full fiscal union or break-up. "
He added: "If no new major policy measures are agreed in late June then the current rally will be short lived and the heat will be on the policy makers to act once again."

Meanwhile, Cyprus has been touted as the next big concern, as it is so exposed to Greek banks. It may need a bail out by the end of the month.

Is travel safe?

Many of the countries caught up in the crisis are major destinations for British tourists, raising concerns for those who have trips planned over the summer.

The first is the possibility of unrest. There have been outbreaks of violence across Europe, and there remains the possibility of more. The advice is always to check the FCO recommendations online before you travel. If they recommend you to avoid an area, you will be entitled to a refund through your travel insurance. If there are no concerns raised by the FCO then you should be fine to travel - although it is advisable to take extra care.

The second is the worry that the euro would immediately cease to become legal tender. The experts have advised that this wouldn't be the case, and that wherever there is a changeover of currency, there will be a period where both currencies are accepted by large stores and tourist services.

Then there are concerns that banks may be closed for a number of days if there is a change in currency while tourists are out there. It may therefore be advisable to pre-load a card with spending money and consider taking more cash than you would normally do, in case there is difficulty in spending on plastic.

Of course, there is always the possibility that concerns among travellers have dampened demand for your destination, so you may also find real bargains - from the holiday itself to spending while you are out there.

Travel to Europe this summer may be more of a risk than it normally is, but it may be far more rewarding too.



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