Huffington Post — The refugee crisis is testing the limits of Greece’s flagging economy, jeopardizing its ability to handle a flow of refugees that shows no signs of slowing.
Added to the existing strains of austerity, the renewed economic pressure from the crisis is stoking fears within the Greek government that a new wave of anti-refugee xenophobia could take hold unless the European Union and Turkey significantly step up to help manage the crisis.
A report by Yannis Stournaras, the governor of the Bank of Greece, confirms as much. The report, presented to the European Central Bank’s general council on Dec. 17, compiles existing research on the economic effects of the refugee flows to demonstrate the risks the crisis poses for Greece.
“The continuation/worsening of the [refugee] crisis adds a downside risk factor to the Greek economy’s outlook,” Stournaras argued. That the message came from Stournaras, a finance minister from 2012 to 2014 under the previous center-right government, strengthens the claims.
These expenses will force difficult tradeoffs since they occur “at a time of strict fiscal retrenchment,” the report notes.
The report also observes that the massive influx of asylum seekers, the majority of whom are Syrian, has been particularly disruptive to the tourism industry on Greece’s islands and to international trade, which relies on unfettered access to Greek sea lanes.
The vast majority of refugees that arrive in Greece continue onward to wealthier European nations, in particular Germany and Sweden, which have until recently been relatively welcoming.
But with a growing number of neighboring nations closing their borders to asylum seekers coming through Greece it is likely many more refugees will remain in the country, which means the government will also incur expenses to ensure refugees’ semi-permanent housing, food and health care, according to Stournaras’ report.
Ironically, wealthier destination countries for asylum seekers, such as Germany, have the greatest potential to benefit economically from the arrival of refugees, the report states, since they have labour shortages in high-skilled sectors that might be filled by new arrivals.
The refugee crisis’ varied economic effects on different European countries illustrates existing disparities in the Eurozone, said Angelos Chryssogelos, an expert in European politics at the London School of Economics.
“It is similar to talking about an increase in net exports in the eurozone: it does not reflect equal gains in all European countries,” he said, noting that Germany often has the largest share of export growth.
“We are not isolating or stigmatizing the Greeks, but helping them to respect their obligations by helping them to correct the deficiencies,” Ernst said.
A Greek diplomat involved in discussions with European officials on the refugee crisis acknowledged Greek mistakes in the past, but said the Commission’s action represents a “very partial take on what the realities on the ground.”
Meanwhile Greece is calling on European nations to honor their own commitments to resettling asylum seekers, and asking the EU to pressure Turkey to limit the outflow of refugees from its territory. The EU agreed in November to give Turkey $3.2 billion in aid for the 2.2 million Syrian refugees who have moved there. In exchange, the EU asked Turkey to more actively prevent refugees from migrating to Europe by sea.
But despite the accord, thousands of mostly Syrian refugees from Turkey arrive every day on Greece’s shores, further straining the economy.
The Greek diplomat notes that European officials often complain that Greece is not processing refugee resettlement applications fast enough, but they are no less slow in resettling the refugees once they have been processed. Of 700 applications Greek authorities have processed since September, only some 200 have been relocated, the diplomat said.
The nonprofit Human Rights Watch corroborates many of the Greek government’s claims.
“Trapping asylum seekers in substandard conditions in Greece would be disastrous for these women, men and children, and is the exact opposite of the kind of sharing of responsibility that we need to see,” Human Rights Watch Greece specialist Eva Cossé said in a Jan. 28 statement. “It would also signal an utter lack of leadership by the EU in the continuing global refugee crisis.”
Cossé also noted that the EU has failed to deploy promised aid and border patrol personnel to Greece or to develop a new continent-wide system for processing the unprecedented influx.
“This state — a bankrupt state — is trying to develop a mechanism to manage the largest refugee crisis in the past few decades. This is absurd,” said Costas Eleftheriou, who specializes in Greek politics at the University of Athens. “They say these people are not managing hot spots and managing the crisis the right way,” he added, but everything Greece does should be looked at in the context of its desperate financial situation.
