Your holiday and the euro-zone crisis

Formalities Posted on 27/06/2012

With the financial crisis becoming catching among euro-zone countries, holidays in Portugal, Cyprus, Spain and Greece have become even better value especially due to the favourable exchange rate for Britons carrying sterling. However, many holidaymakers have been put off travelling to the above-mentioned countries due to the risks of last-minute cancellations linked to financial turmoil. The Independent's travel expert, Simon Calder, has put together a great Q&A that addresses holidaymakers' concerns. We've summarised it for you below. For travellers who are worried about an electronic banking freeze in the case that Greece leaves Europe, Calder advises to cover your back and draw out more cash than you usually would instead of relying on cards for emergencies. He also confirms that the exchange rate is actually the best it has been for buying euro since 2008.

Due to the risks of a sudden change in currency, it is worth asking for lower denominations. He explains that "If any country suddenly leaves the euro, the most likely interim currency is the existing euro overprinted with a symbol, or possibly with a corner clipped. The value of this clearly identified new currency would fall by perhaps 40 per cent. While traders sort themselves out, and before a market in the new currency begins, tourists are likely to pay in euro but be given change in new money. Pay for a 15 euro round of drinks with a 50 euro note, and you could get back change in currency worth only 20 euro. That is why low-denomination notes are theoretically useful."

However, if you buy euros before your trip only to find out that the country has left the euro before your holiday, you shouldn't worry as the euro is still the most advantageous currency. Moneychangers will spring up everywhere in any country that leaves the euro, reassures Calder.

Travellers should still take a credit card in case of an emergency anyway; a credit card, or a pre-paid currency card. You can charge it with euros at a specific rate, making it easier to manage your spending: with a no-ATM-fee card and an exchange rate of 1.25 euro, you know that 1 euro coffee has cost exactly 80p, explains Calder.

With regards to political turmoil, if you decide to cancel your holiday even if it is still going, you are not entitled to a refund. If trouble breaks out while on holiday, the Foreign and Commonwealth Office (FCO) will do what it can to help British nationals in need but assistance may be more qualitative with your tour operator, advises Simon Calder. To be covered properly however, you are obliged to book a package holiday.

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