Euro versus drachma

TUI, one of Europe's largest travel agencies, has asked its Greek hotel partners to renegotiate contracts to protect against financial loss, according to a report in the German mass circulation Bild newspaper.

The possibility that Greece could eventually leave the eurozone due to its massive debt problems is now being discussed in business circles, even though officials in Greece and the European Union insist that everything is being done to prevent that scenario.

But apparently TUI is not taking any chances and wants new contracts. In a letter to Greek hotel owners, the travel group said the new contracts contained provisions to stem losses should debt force the country to exit the eurozone and switch to a new currency.

"This is in the interest of the holidaymaker," said company spokesman Robin Zimmermann. "All TUI subsidiaries generally have to show that they are insured against currency fluctuations," he noted.

"There is more than a theoretical possibility that Greece will have to leave the eurozone," Zimmermann added.

Drachma would plummet

The reason for the move is that if Greece were to drop the euro, any alternative Greek currency would be severely devalued, representing a serious currency exchange risk for any company operating in Greece.

According to Bild, TUI told Greek hotel owners that "if the euro is no longer the currency, then TUI has the right to pay bills in the new currency."

Greek hotel owners are unsurprisingly not taking kindly to the request. "No hotelier will do this and we have turned to the Greek Tourism Ministry. TUI cannot pressure any hotelier to sign something like this," said Andreas Andreadis, president of the Greek Tourism Association.

But TUI probably can do this. TUI is one of the biggest travel agents for booking vacationers to Greek destinations, particularly in Germany and Britain, which are the two largest groups of holidaymakers in Greece.

Author: Gregg Benzow (dpa, AFP)
Editor: Ben Knight