Blessing or Curse? The Rise of Tourism‐Led Growth in Europe's Southern Periphery

Abstract

Despite being one of the world's major internationally traded services, tourism remains neglected within debates on European integration and growth models. We highlight the rise of tourism-led growth in Southern Europe. We argue that the process of European integration has been a doubleedged sword, simultaneously incentivizing and forcing Southern European economies to reap their comparative advantage in tourism. While European integration has created the preconditions for the expansion of intra-European tourism, monetary integration preempts macroeconomic management. Since the Eurozone crisis, internal devaluation and fiscal austerity have suppressed domestic growth drivers, inducing these governments towards an export-led growth strategy. We document the emergence of unprecedented tourism-related current account surpluses in Southern Europe, driven strongly by tourism imports from the EMU-core countries and the UK. Thus, while different types of export-led growth strategies now coexist in the EMU, Southern Europe's excessive reliance on international tourism for growth comes with severe pitfalls.

Fragility and Antifragility in Cities and Regions

“…Tourism has certainly brought prosperity to Sifnos, as to most other Greek islands, freeing its people from the hardship and toil facing older generations. According to recent estimates (Bürgisser and Di Carlo 2022), tourism accounted directly and indirectly for over 20 per cent of Greece's gross domestic product, and over 25 per cent of all employment in the country. At the same time, tourism acts as a 'resource curse' (Auty 1993), sucking up resources from competing uses.…”

Governing the commons on an Aegean island: the management of water resources on Sifnos, Greece

“…Tourism has certainly brought prosperity to Sifnos, as to most other Greek islands, freeing its people from the hardship and toil facing older generations. According to recent estimates (Bürgisser and Di Carlo 2022), tourism accounted directly and indirectly for over 20 per cent of Greece's gross domestic product, and over 25 per cent of all employment in the country. At the same time, tourism acts as a 'resource curse' (Auty 1993), sucking up resources from competing uses.…”

Social Reformism 2.0

“…Although COVID-19 has acted as a brake in this respect, in the next twenty years a similar opportunity may open up for Southern European countries; that is, the possibility of imposing itself as a hub of tourism from core-EU countries, the United Kingdom and the growing middle classes of emerging economies outside the European Union. Indeed, Southern Europe has already become a big magnet for tourism in the last few decades (Bürgisser and Di Carlo 2022). However, the intrinsic quality of cultural and historical heritage alone is not enough: it is necessary to build around it an adequate framework of infrastructures and services that can perform and manage the role of a magnet.…”