Tourists make their way past a European Union flag and a Greek national flag at the seaside of the island of Paros, Greece June 26, 2015. REUTERS/Matthias Williams
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PAROS, Greece: Alexis Kalaitzoglou makes a swift gesture to describe what he thinks about Prime Minister Alexis Tsipras: The shopkeeper of this busy tourist island pulls his leg back and swings it forward as if to give Greece's leader a good kicking.A rise in consumer taxes on Greek islands' goods and services such as the ones Kalaitzoglou sells is one of the sacrifices creditors are seeking from Athens to unlock bailout funds that will allow Greece to remain in the euro.On Paros and other islands, VAT rates are 30 percent lower than on the mainland.The anger of Kalaitzoglou and others underscores Greece's dilemma as it flirts with an exit from the euro single currency: After five years of belt-tightening in exchange for bailout money, Greece needs to promise more austerity to stay financially afloat. One in four Greeks is out of work and an average of 59 businesses are closing daily, according to the National Confederation of Hellenic Commerce (ESEE).Beyond the tax hikes, heightened uncertainty over whether Greece will stay in the eurozone is also beginning to hurt tourism business.Some economists argue that returning to a sharply devalued drachma – the prospect Greece faces it if does exit the euro – could boost tourism and other service sectors by making them cheaper.
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