“If the eco­nomic cri­sis is rel­e­gated to sec­ond place, it is be­cause a more press­ing is­sue has re­placed it at the top of the list of peo­ple’s wor­ries”

Financial Mirror (Cyprus) - - FRONT PAGE -

Fol­low­ing the tran­sit through Greece of al­most one mil­lion im­mi­grants over the last 14 months headed to var­i­ous EU coun­tries, and the sub­se­quent clo­sure of bor­ders across Europe, in­clud­ing FYRO Mace­do­nia in the north, more than 50,000 refugees have now been trapped in the coun­try un­able to turn back to Tur­key or move for­ward to other Euro­pean des­ti­na­tions. A situation which is ex­pected to get far worse as refugees keep ar­riv­ing in droves.

With Greece’s fi­nances in a pre­car­i­ous state with the coun­try lit­er­ally cut off from global fi­nan­cial mar­kets, and re­ly­ing ex­clu­sively on EU backed loans and aid pack­ages, the eco­nomic bur­den aris­ing from the ever in­creas­ing num­ber of refugees stranded in the coun­try is threat­en­ing once again eco­nomic sta­bil­ity. If that was not enough, the gov­ern­ment’s mis­guided poli­cies over en­trepreneur­ship, tax­a­tion, so­cial re­form and pen­sions have com­bined in send­ing the econ­omy into a neg­a­tive tail­spin with lit­tle prospect of re­cov­ery.

Al­though un­em­ploy­ment seems to have sta­bilised at 24.47%, or 1.2 mil­lion of peo­ple out of work, the highest in the EU, the econ­omy is still con­tract­ing, driv­ing thou­sands of com­pa­nies into bank­ruptcy or forc­ing them to move their op­er­a­tions abroad, es­pe­cially to Cyprus and Bul­garia, where a more in­vest­ment-friendly en­vi­ron­ment is in place.

As far as the econ­omy is con­cerned, the crit­i­cal is­sue now fac­ing the Greek gov­ern­ment is the need the con­clude be­fore the end of April the as­sess­ment by the lenders of the cur­rent bailout pro­gramme. Un­der the terms of the July 2015 bailout, Greece must pass mea­sures de­signed to en­sure gov­ern­ment fi­nances to a pri­mary bud­get sur­plus at 3.5% of eco­nomic out­put by 2018, with a coun­try’s pri­mary bal­ance de­fined as its rev­enues mi­nus ex­penses in­clud­ing debt re­pay­ments. Ac­cord­ing to a lat­est re­port pub­lished in the the IMF has hinted that it is will­ing to walk away from the bailout if it deems the re­forms in­ad­e­quate, a move that would plunge Greece back into eco­nomic un­cer­tainty. With­out the IMF, noted the FT, a Ger­man-led group of cred­i­tor coun­tries have said they would be un­able to se­cure par­lia­men­tary ap­proval for their par­tic­i­pa­tion in the EU’s res­cue, po­ten­tially scup­per­ing the deal.

Reach­ing a deal on the re­form mea­sures is cru­cial as it will en­able the Greek gov­ern­ment to pass the first quar­terly re­view of its new bailout, thus fa­cil­i­tat­ing ad­di­tional dis­burse­ment of funds from the ESMF, while it would al­low the Eu­rogroup to start dis­cussing the po­lit­i­cally fraught is­sue of debt relief. Ac­cord­ing to most Greek me­dia re­ports, Alexis Tsipras is des­per­ate to move quickly to the debt relief ne­go­ti­a­tions which has been a prime goal of his agenda as he faces fall­ing poll num­bers and a re­vi­talised op­po­si­tion party.

The bailout is still a big is­sue for most peo­ple and the gov­ern­ment in Athens. The lat­ter is still wait­ing for cred­i­tors to con­clude an as­sess­ment of the pro­gramme and de­cide whether to re­lease the next tranche of funds. Aus­ter­ity mea­sures are as con­tro­ver­sial as ever, with farm­ers block­ing roads to protest plans to re­move sub­si­dies for the agri­cul­tural sec­tor and work­ers protest­ing ever-ris­ing taxes. But things seem to be rel­a­tively sta­ble. Al­though the prospect of a Grexit is still very real, no­body ex­pects the coun­try to leave the eu­ro­zone im­me­di­ately. For many Greeks, res­ig­na­tion over the fu­ture has re­placed angst. Syriza, note po­lit­i­cal an­a­lysts, lacks the pop­u­lar­ity or the ini­tia­tive to be re­bel­lious, and Tsipras has linked his po­lit­i­cal sur­vival to the evo­lu­tion of the bailout pro­gramme.

“If the eco­nomic cri­sis is rel­e­gated to a sec­ond place”, note po­lit­i­cal com­men­ta­tors in Athens, “it is be­cause a more press­ing is­sue has re­placed it at the top of the list of peo­ple’s wor­ries. With coun­tries along the Balkan mi­gra­tion route clos­ing their bor­ders, Greece is fast be­com­ing a dead end for asy­lum seek­ers en­ter­ing the coun­try from Tur­key”.

Asy­lum seek­ers could even­tu­ally turn to Al­ba­nia or Bul­garia as they try to reach north­ern Europe, even if those routes are longer and through more rugged ter­ri­tory. But if those coun­tries close their bor­ders too, Greece will be to­tally iso­lated.

Al­though the Greek gov­ern­ment is send­ing Brus­sels a strong mes­sage that it wants to re­main in the Schen­gen area and new mi­grant re­cep­tion cen­tres are open­ing up both on the is­lands and the main­land, chaos still pre­vails at choke­points in the port of Pi­raeus and the Idomeni bor­der cross­ing with Skopje, where thou­sands of refugees re­main stranded. With the gov­ern­ment stead­fastly re­fus­ing to in­ter­vene on so called “hu­man­i­tar­ian grounds”, to trans­fer peo­ple to ogranised re­cep­tion cen­tres, the cri­sis gets worse as ev­ery day passes by.

As a lat­est Strat­for anal­y­sis points out very suc­cinctly: “There are no short-term so­lu­tions to the refugee cri­sis, and peo­ple will con­tinue to try to en­ter the Euro­pean Union even if gov­ern­ments build more fences and en­hance their sea pa­trols”.

The main threat for Greece now is that the mi­gra­tion cri­sis could ex­ac­er­bate the coun­try’s un­der­ly­ing prob­lems and lead to a new phase of po­lit­i­cal and eco­nomic un­cer­tainty. Even with a loom­ing wave of im­mi­grants headed for their coun­try’s shores, the lin­ger­ing topic of de­bate among many Greeks is still how their coun­try should move for­ward on the eco­nomic front.

Today, six years af­ter the first bailout agree­ment Greece is still a coun­try very much in a cri­sis. A walk through the streets of Athens or in any other ma­jor city or even in the coun­try­side re­veals the ex­tent that the en­vi­ron­ment is be­ing de­graded with thou­sands of shut­tered shops, graf­fiti torn walls and streets full of rub­bish.

“The coun­try’s most vis­i­ble and up­set­ting pro­gres­sion to deca­dence is now set to con­tinue un­abated fol­low­ing the ris­ing in­flux of mi­grants, who are be­ing lit­er­ally trapped within Greece’s bor­ders, with a gov­ern­ment un­able and un­will­ing to take ef­fec­tive mea­sures to pre­vent eco­nomic and so­cial de­cline,” noted Dim­itris Keridis, a dis­tin­guished pro­fes­sor of in­ter­na­tional re­la­tions at Pan­teion Univer­sity in Athens.

Al­though Greece’s rul­ing Syriza party has ap­par­ently cut a grand deal with the Euro­pean Union that should keep the econ­omy afloat for the time be­ing, and the prospect of a Grexit ap­pears re­moved, at least over the next few months, the coun­try’s eco­nomic and so­cial situation is per­ilous to say the least with a very real pos­si­bil­ity of re­newed po­lit­i­cal dis­cord, if not vi­o­lence, on the hori­zon.

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