“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”
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.