Unjustified surprise

A nasty surprise was in store on Christmas Eve for hundreds of travelers who had booked package trips with Manos Travel, one of Greece’s leading tour operators. The joy and anticipation they felt as they arrived at Athens’s airport early in the morning gave way to a huge anti-climax as Manos’s staff there informed them that the company could not meet its obligations and that people could not go on their trips. Deposits, dreams, the plans of an entire year were destroyed. Those who had already set out found that their hotels were unpaid and their tickets were canceled. Manos’s collapse could be classified as one more business failure, one more victim of the global economic crisis in the wake of September 11 and could pass unnoticed, like so many others. But this specific case is indicative of a broader, underlying crisis. It was an open secret in the tourism market that the aforementioned firm’s near bankruptcy was being disguised for the last few years. Banks, tour operators and airlines had long known of Manos’s economic hardships and only the public remained unsuspecting. People in the know are aware that a large number of firms, including many long-established names, have been beset by similar problems and are being kept solvent via unfair practices that are at odds with free market principles. Big commercial banks deal with plenty of similar cases and often grant indirect subsidies which do not meet banking criteria. Many problematic areas in all aspects of economic activity, from the tourism industry to the media, are blanketed, while many major firms are on the brink of bankruptcy. The question, therefore, is whether this policy of indirect subsidy is what is best for the economy and society. Local and international experience shows that these policies are harmful, especially at times like this. The subsidizers ought to know this. Their constant surprise is unjustified.

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