The austerity measures approved by the Greek parliament are provoking a violent backlash from protestors, given their dire implications for future generations of young Greeks.
However the long term economic problems in Greece also have potentially serious implications for English holidaymakers should they suffer the misfortune of suffering an injury in that jurisdiction.
Let us consider the example of an English claimant who suffers injury due to the negligence of a third party Greek driver, whilst on holiday. Ordinarily the claim would be negotiated with the Greek insurers of the defendant driver, if the claim was pursued in the Greek jurisdiction or, alternatively, with the UK handling agents nominated by the Greek insurer, if the claim was pursued in the English jurisdiction. Either way it is the Greek insurer that must pay the damages and associated costs if the claim is successful.
But what happens if the Greek insurer goes bust? Several Greek insurers have already entered into liquidation as a consequence of the current financial turmoil, and it is seemingly inevitable there will be further casualties in the months to come.
In these circumstances the best advice would usually be to lodge a claim against the Greek Auxiliary Fund, which is the Greek equivalent of the Motor Insurers' Bureau in the UK. This fund was set up to help ensure damages are paid to a claimant injured in an RTA in circumstances where there is no identified defendant, an uninsured third party vehicle, or if the insurer of the third party driver becomes insolvent.
However, the Greek Auxiliary Fund reportedly has an insurmountable debt of approximately 700 million euros. This is surely unsustainable and it therefore seems inevitable that the Fund will be declared bankrupt in the foreseeable future. If that occurs, there is currently no alternative means of recovering damages (assuming the third party driver has insufficient financial means to satisfy a judgment).
This problem is not necessarily unique to Greece. The Eurozone crisis has inevitably placed greater financial strain on insurers from other member states, and there is therefore a significant risk that insurers from other jurisdictions will also fail. For the moment, we must hope that the financial contagion does not spread to the equivalent guarantee funds in those jurisdictions too.