The Greek crisis continues to tear down the Euro as more and more data indicate that Greece and its banks are edging closer to collapse.
Yesterday, the prices of Greek bonds fell for the 7th day in a row. The expected return on Greek governmental bonds for 10 years rose to 7.353%. This is more than 4% higher than the return on German governmental bonds, and they’re both members of the Euro club.
The problem is likely to grow as it seems that not too many banks and financial institutions are willing to lend Greece any more money. The sentiment is highly negative and Greece is depending on the good will of other members of the Eurozone which seem reluctant to lend the kind of helping hand that will actually help see it through this crisis.
But if we look at this situation from the viewpoint of Forex traders, we have to ask ourselves the question: is a weak Euro good for Greece?
Let’s examine this question.
One of the biggest sources of revenue that Greece enjoys comes from tourism. Greece is a country steeped in history and is one of the most popular tourists’ detinations in the world.
However, through the years of a strong Euro, the Greek tourism industry suffered as other, similar locations such as Turkey, offered a similar experience at a reduced cost.
Now, when the Euro is weak, a Greek holiday has become much cheaper to people from other nations. This may actually be good news for Greece.
Will a surge in tourism help Greece climb out of its problems?
It’s difficult to answer as the crisis is deep and profound. In addition, if Greece’s powerful public sector will go on strike, the country may come to a standstill, not something that tourists will like.
We shall have to wait for the summer months to see if the Euro remains as weak as it is and whether this helps Greece out.
