Heart of Marrakesh feels impact of euro zone crisis

Wed Jun 27, 2012 10:37am EDT
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By Zakia Abdennebi

MARRAKESH, Morocco (Reuters) - An Islamist bombing of a cafe last year hurt trade for the snake charmers and trinket sellers who entice foreign tourists to Marrakesh's Jamaa el-Fna square, but the euro zone debt crisis risks doing far more lasting damage to business.

The square, a riot of colors, smells, music and commerce surrounded by the red walls of the old city, is a barometer of how Morocco's economy - heavily reliant on the foreign tourists who usually flock to the square - is performing.

The indications from traders, officials and tourists here are that visitors from Europe, preferring to hold onto their savings in the face of the financial crisis at home, are not coming in the same numbers as before.

"I know a lot of friends stopped travelling because of the crisis," said a French tourist who wished only to be known as Jean-Baptiste, who was strolling in the square recently with his wife, Mathilde.

Tourists from western Europe typically account for more than 70 percent of all visitors annually to Morocco, where total visitor numbers fell 10 percent in the first quarter of 2012 from a year earlier, according to official data.

The downturn in trade in Jamaa el-Fna square shows that while the euro zone crisis has its epicenter in places like Athens and Madrid, the tremors are being felt much further afield.

Morocco is vulnerable because Europe is its biggest trading partner and tourism is it biggest source of foreign currency - crucial to keeping its fragile balance of payments afloat - and accounts for up to 10 percent of gross domestic product.

Tourism is also the second-largest industry in terms of jobs, employing 400,000 in this country of 34 million, which is struggling to contain unemployment that has reached 33 percent among people under 35.   Continued...