Greek banks count on tourism for bad loan relief

Rhodes ferry operator Paris Kakas cannot lose another summer to the pandemic if he is ever to repay a debt of millions of euros.

His anxious wait for tourists to return mirrors that of Greece, which is counting on salvaging this summer season to head off a wave of insolvencies.

Tourism businesses are on their knees. Kakas saw his revenue slump 75% last year.

"We faced a lot of difficulties, we had a really short season - from mid July to end October with a limited number of passengers allowed on the boat. Besides financial problems of the company we also had problems with paying the staff, who have worked for us for many years and we couldn't give them work so they could survive."

Greek banks are grappling with Europe's heaviest burden of bad debts and the legacy of the financial crisis.

The central bank estimates a quarter of loans to the tourism sector are now non-performing.

Hoteliers warn that many firms are on the brink.

Ioannis Hatzis runs three hotels on the island of Rhodes, and is on the board of the industry association in the country:

"Any corporation that tried to grow in the past years and has actually increased debt will not be able to service it if tourism will not bounce back."

Greece on Saturday (May 15) opened its doors to tourists from the EU, the U.S. and Britain, among other key markets, lifting the need for people to quarantine as long as they have been vaccinated or tested negative.

Tourism employs one in five people in Greece.

Businesses have had government aid worth 40 billion euros - or about $49 billion.

But Kakas says Athens still needs to do more.

Part of his debt has been passed on to a fund, and he worries they could come after the collateral.

For companies like his Sea Dreams, another bad year could spell the end.

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