Sunday, February 28, 2016

A Travel Agency Named Greece?

"I no longer understand the policies of the Greeks. It is unacceptable that Greece acts like a travel agency and simply sends all refugees onwards to the North!" - Werner Faymann, Federal Chancellor of the Federal Republic of Austria, a member of the EU. The comments are about a fellow member of the EU.

Is Werner Faymann an enemy of Greece?

Flashback to June 2015. The Greek debt crisis had reached boiling stage. In the Eurogroup, the ratio was 17 against 1. Greece had become a pariah. And in the midst of all of that, Faymann decided to visit Greece to express solidarity to Alexis Tsipras and the Greek people. Not all his European colleagues thought that this was a good idea. In fact, several of them criticized Faymann for sending out the wrong signal. And yet, Faymann warned that Greece must not be humiliated; that further linear budget cuts made no sense and would only hurt the poor; and that an honest compromise was necessary. From then on, Alexis Tsipras used the phrase "my friend Werner".

Flashback to October 2015. The refugee crisis had become a true "V√∂lkerwanderung". Faymann decided to visit "his friend Alexis" to lend support. Together, they visited the island of Lesbos. "When masses of people are heading North towards the border, they cannot be stopped very easily", Faymann was quoted as saying after visiting a Hotspot under construction.

Around the same time, Faymann started a feud with his Hungarian counterpart Victor Orban. Orban's erecting a border fence was a slap in the face of humanitarian values, Faymann argued. His bussing of refugees from the Croatian to the Austrian border reminded Faymann of the transportation methods of the Nazis.

Four months after that, Austria hosted a Balkan Conference in Vienna. Having just set upper limits for refugees, Austria negotiated an agreement where the flow of refugees would be more of less stopped; at least reduced to very low levels. All countries would help to fortify the Greek/FYROM border so that refugees could no longer cross in an uncontrolled way. Even though it was not the intent of the Balkan Conference, the result clearly is that Greece will turn into a "warehouse for all refugees", to use Alexis Tsipras' words.

Greece was not invited to the Balkan Conference, which certainly is an injury to its interests. When asked why Greece had not been invited, the Austrian Foreign Minister Alexander Kurz said that "Greece has not demonstrated any interest to be constructive in the refugee crisis. There have been innumerable meetings and conferences with Greece. Except: Greece was never prepared to even discuss a reduction of the refugee flow. Greece only wanted to discuss how to send refugees as quickly as possible on to the North". That undiplomatic frankness added insult to injury.

One is inclined to think that Austria had a change of government. The previous government had clear humanitarian priorities and defended European values. The new government, installed in the beginning of 2016, made Victor Orban of Hungary look pale. Not only did it announce an upper limit for refugees but, literally overnight, it recreated the spectre of the Habsburg Empire where sly Vienna often was in defiance of arrogant Berlin. Diplomatic niceties were of no importance to the new government. Instead, the Interior Minister opened the Balkan Conference with the words: "Our intent is to provoke. Our intent is to initiate a domino effect. We want to cause a chain reaction of reasonableness".

Except, there was no new government in the beginning of 2016. It was the same government and the same ministers as the year before.

My intent is not to justify the conduct of Austria's government. Instead, my intent is to explain why the government has undergone such a radical change of conduct in the hope that this will be of service to my Greek readers.

I think it is important to differentiate between the flow and the stock of refugees. The flow are the hundreds of thousands of refugees who have crossed European borders in recent years. The stock are those refugees which decide to stay within the borders of one country. The flow incurs one-time costs (temporary infrastructure, transportation, logistics, etc.). The stock incurs permanent costs for generations to come.

Austria, too, has bussed hundreds of thousands of refugees from its Southern borders to the border with Germany and it has earned much anger from Germany for doing that. However, Austria has also built up a stock of 95.000 refugees in the year 2015 alone. Under current laws, these refugees will be entitled to bring along their families and the general expectation is that this will trigger a multiple of 3-4. In other words, 2015's stock of 95.000 will automatically become a stock of 300-400.000 within a few years.

The stock remains in the country and it triggers enormous ongoing costs: building homes; expanding social services like schooling, training, health care; and integration measures in general. Put differently, there will be 300-400.000 new residents who are entitled to essentially the same social benefits as Austrians, and the social benefits in Austria are generous: roughly 850 EUR per month for the first adult, half of that for the second adult and about 200 EUR per child. A family of four will quickly collect 1.500-2.000 EUR per month. A politician recently published a calculation where, in Vienna, a family of four can make up to 36.000 per year if all special benefits are taken advantage of.

Mind you, these are not income figures for working. They are income figures if not working. And there are many Austrians who do not achieve these income figures despite working which makes for fertile ground for anti-refugee sentiment.

Given Austria's demographic challenge over the next decades, refugees could become a blessing and the answer to that challenge. Provided, of course, that refugees finds jobs, earn income for work and make contributions to the social systems. Regrettably, the statistics are not very promising. In Switzerland, for example, statistics show that up to 80% of refugees are still recipients of social benefits after 5 years in the country. Time will tell how Austria will fare in that regard. Early analyses suggest that, at the most, 25-30% of the arrivals have skills which are in demand. At the same time, Austria presently has the highest unemployment since the end of WW2.

For quite a few months, Chancellor Fayman was 100% loyal to Chancellor Angela Merkel. They both agreed that this was a European problem which could not be solved by any one country alone and that, in consequence, national measures were detrimental to the overall project. Merkel/Faymann preached without end that the stock would have to be Europeanized (a fair distribution throughout Europe) and that the flow would have to be reduced. And they were essentially told by others to go fly a kite, particularly by the East Europeans.

That was when Faymann showed nerves for the first time. Upset by the lack of solidarity from the East, he suggested that those who failed to show solidarity by accepting their fair share of refugees should see a reduction in subsidies they receive from the EU. After all, subsidies are a form of showing solidarity, too. As sensible as this suggestion sounded, Faymann was literally clobbered for making it. Blackmailing one another was not a European value, Faymann was educated. That was a formative experience for Faymann.

Then, major atmospheric changes took place in Germany, Austria and Scandinavia. Sweden, the former showcase for humanitarian policies, reached the end of the line and said they couldn't handle any more refugees. In Germany and Austria, the former 'welcome culture' mutated into a 'farewell culture'. Angela Merkel dared to tell Syrian refugees that when the war was over, they would have to return to Syria. But still, both Germany and Austria were still nobly accepting stock in their countries. And then Faymann blew a fuse.

After Austria broke a taboo by announcing its new policy of limiting the stock for 2016 to 37.500 (after 95.000 in 2015), literally all hell broke loose. Faymann was told by his European colleagues that this was anti-European, anti-humanitarian, anti-everything. Austria should be ashamed of itself. And then Faymann cried out: "Austria, with a population of 8 million, has accepted a stock of 95.000 in 2015. The Austrian ratio of acceptances/total population is arguably higher than that of Germany. Before anyone criticizes us, they should show the same humanitarian effort as Austria has shown so far!"

With that, the genie of diplomatic restraint was out of the bottle and it will be hard to get it back into the bottle. The Austrian government (as represented by a now upset and feeling-offended Chancellor, by a hard-nosed Interior Minister and by a slick young Foreign Minister) is now in defiance, a defiance which is based on demonstrated positive actions and not on beautifully articulated beliefs. The message to others clearly is: "First do as much as we have done and then we can talk!" The message to Greece is: "Don't make so much noise when you have taken in a stock of only 11.000 in 2015 with a total population 3 million greater than ours!"

It's a bit reminiscent of Clint Eastwood's "Go ahead, make my day!", except that Eastwood only had a revolver to impress his opponents whereas Austria has the track record of an accepted stock of well over 100.000 refugees by now. And all of these refugees are extremely well taken care of by Austria.

As unlikely as it appears today, it still cannot be ruled out that the EU, threatened by its demise, will eventually get its act together. Any European solution would undoubtedly have to involve some form of fair burden sharing among all members as regards the stock and some effective policies to control the flow. Who knows? If that miracle were to happen, and it would have to happen within weeks, then perhaps people will look back and conclude that the turning point was when Austria declared its intent 'to provoke a chain reaction of reasonableness'.


  1. Mr. Kastner:

    - Acts threatening the very existence of another state can only be considered as hostile acts. You are talking about the problems (financial, demographic) Austria may deal with in few years, while the closed borders can lead Greece to chaos in a just few months.

    - Claiming that Austria has accepted more refugees than Greece despite its smaller population is misleading. In the 1990s, only the Albanian immigrants in Greece almost reached the 10% of her total population. Greece was then financially and socially capable of dealing with that. Today (for obvious reasons) she is not anymore.

    - You are differentiating between the flow and the stock of refugees, but a PERMANENT flow taking place under horrible circumstances can be disastrous. Don't tell me that there'll be many tourists this summer in the islands of Eastern Aegean or that the pictures of drown babies aren't going to damage Greek tourism as a whole. And now that the country is becoming a huge "hot spot", anyone can imagine the social and financial consequences.

    - I don't understand why the only two options for Austria (or other countries) should be: a) accept refugees and treat them exactly like the citizens of the country (social benefits and all), b) don't accept refugees at all. The way I see it, taking basic care of more refugees would be better than taking "extremely good" care of less refugees. If I were a desperate Syrian I'd be okay with that.

    1. Believe me, to write something which could be interpreted as my defending Chancellor Faymann was not easy for me. I have little regard for the man as a person and I think he is the weakest Chancellor Austria has had at least in my lifetime. Last year, my Greek wife fell for him because he visited Greece twice and said nice words about Greeks. I warned my wife that actions spoke louder than words and that Faymann was a man for words. She wouldn't listen to me but now she hates Faymann with a Greek passion... What is fascinating, though, is that the man who used to be the most humanitarian European head of government together with Merkel until a few weeks ago has now become seemingly a tougher version of Victor Orban. I tried to explain why that could have been so.

      I am glad you mention the Albanian precedent. Since we spend a good portion of the year in Northern Greece, I am quite familiar with this issue. I think the Albanians are a good example of immigrants with a positive impact. I often wondered what Northern Greece would do (or would have done) without the Albanians. They work hard and they do good work. They do jobs which Greeks would never even think of doing. They truly contributed to the economy. And, to the extent that they were legal immigrants, they also contributed to society and its social systems. My sister in law takes a different view. She is a grammar school teacher with a high proportion of Albanian kids. To her, Albanians were parasites. They came to Greece as illegals, took advantage of all the social services Greece offered to them, earned good money 'in black' and all of that without paying taxes and social contributions. That may be so but even illegals add something to the economy if they are productive.

      An economy's national income (GDP) rests on the following formula: "number of workers/workforce x productivity". If Germany were to cease allowing immigrants, the Germans would become very much poorer in the next few decades because they could never make up through productivity increases the demographic decline in the labor force. If the present refugees turn out to be productive and if they can be integrated successfully, they could trigger a new "Wirtschaftswunder" in Germany. Or it could be the other way around. The trouble is that one can only speculate today and the answers won't be known until several years from now.

      Another example would be the Greek/Turkish population exchange a hundred years ago. That could have suffocated Greece. Instead, I believe - at least in Northern Greece - it had a very positive effect on economic development.

      If you want to be crucified, then you go to Austria and suggest that refugees should get less social benefits than Austrians. You would immediately be stamped a racist.

      BTW, the hostile acts do not come from countries to the North of Greece. They come from the country across the Aegean and from those who support the mass migration into Europe for strategic purposes.

    2. Mr. Kastner,

      It is a good point which you make for the Albanians. I too personally believe they heavily contributed to the Greek economy in the last 30 years. 2004 olympic structures were with the hands of Albanians.

      Even when i was a toddler visiting in the summer, my grandfather, a farmer in his twilight years had two Albanian brothers working for us. To this day i still require the services from the one brother. (Unfortunately the one died a few years back.) Lets take a look. He pays about 2,500 euro annual to OGA pension plan. He pays for rent and living essentials (in a periphiry which has high unemployment) while living frugal for 9 months, as so he can gather money and send back to Albania. Which is not a bad thing because having Albania as a country increase in growth helps the general region. Meanwhile, where there is established Albanian work laborers, they help maintain keep the cost of labor stable. They are almost a micro economics labor wage stabalizer. In the good years they got increases and in the crisis they have taken decreases. All the time though the peaks and troughs are always logical versus the value of work labor that they provide. This set precedent to help keep really useless cheap labor from other migrant nations entering our work force. I dont want to be rascist but Albanian's versus all other migrants that have come to Greece for work, proved to be the best value for money.

      In the meantime maintaining this micro stability, in the crisis it allowed Greeks returning to the labor work force as to gain the wages not found anywhere else. The majority of Albanians have good prospective on Greece and Greeks. Ofcourse there will be bad mafia types but the majority contributed. In the end many Albanians have changed their names and even their religion of their children as to assure greek citizenship and have no desire to leave Greece, even in this financial crisis. Many have become good young scholars and i am quite proud of them. You don't have to have greek blood to be greek, only the love for being greek.

      I have thought the same way for the syrians. I believe they can contribute to the greek economy but not in "hands labor" more educated positions. But unfortunately most Syrian migrants do not want to stay in Greece.


  2. Dear Mr. Kastner,

    I understand your points and the position of Austria. Everything is quite clear and i can maybe say okay i understand that Austria is trying to "think out of the box" to get Europe to start thinking. The problem though with that is the mannerism and the bad political way that they try to shake things up, meanwhile offend our idiots.

    I do not forget how Austrian President Fayman, did so well support us in the summer. And i would add that his speech was quite elquiently put. Unfortunately Tsipras is not the new Kapadistria.

    I was not quick to judge and is why i asked on the previous thread how many migrants have been accepted by Austria. Indeed the contribution made is quite grande and i commend this.

    But what i would suggest is instead of "countries" pointing fingers, the EU should sit down and practically list each of the nations and how many migrants have been taken in. Considering population and GDP per head a calculation of what % of each country should take form the migrant flows. Those who choose not to take migrants should pay very heavy levies against the countries that do take care of the migrants. Cost 100 per person per day? Ok you get 200.

    My compatriate well put one issue for Greece. As of now Lesvos, Kos, Samos, and all islands facing turkey coast have a -70% reduction of toruist bookings. (Like wise turkey as well) The rest of Greece is more or less okay. But what about these people who are highly dependant on a successful tourist season?

    You mention we have accepted 11,000 migrants. Well that is quite funny, especially when i hear discussions of thousands here and thousands there. Just the port transfers to Pireaus everyday are 2-3,000 people. Just considering the migrants moving about in Greece is nearly 100,000. They are not staying but they are making the country and quite difficult place. They are all over the place. While the inflows continue and soon to explode in the summer time, we will have 500,000 people in and out. As a country can we manage, the identification of each of these people, temporarily hold them, then move them to transfer camps, and so on. Meanwhile accept more into our society? Which also need the same requirments provided by Austria to their migrants. Whiel in our economic crisis?Meanwhile police all these people?

    Mr. Kastner, I dont want to make excuses. So far we have managed in the last few months to improve our managment on this issue but indeed there was a huge delay to action. We should do more and ofcourse use our public resources for once to maybe help on some issue. But as the Austrians are complaining so are we. The problem of the infows does not end. And it will not end any time soon.


    1. I agree that pointing fingers from one country to another does not serve any constructive purpose but one has to brutally point out that the party which has completely failed in all of this is the EU itself. The refugee problem has been around ever since Berlusconi threatened to issue passports to refugees landing on Lampedusa, and that was a very long time ago! The Turkish/Greek border issue has been around for years but the EU seriously took note of it only last year when it exploded. Frontex is an EU institution which is supposed to dedicate itself to external border issues but one hasn't seen much from them. It seems to me that the poor Schengen citizen who believed that external borders were taken seriously was living in a fantasy world. And the matter-of-fact manner in which everyone fatalistically agrees that maritime borders cannot be protected is mindboggling to me. Check with Australia how they reduced illegal immigration across the sea.

      My view on possibly containing mass migration as we see it now is as follows: as long as migrants perceive a much better world elsewhere they will see that they can get there, particularly when they are in war circumstances. Migrants ceased to go to Australia once they saw that the life which they could expect there was no good. Presently, we offer migrants incentives: the hospitable Greeks give them a hearty welcome on the islands and the "Gutmenschen" of Germany and Austria go overboard to treat them well. And I guess the traffickers do their own thing with promising the migrants that milk and honey will await them in Europe. I think a combination of things is required: Europe must become somewhat less attractive for migrants and the Asian/African continents must become much more attractive for them to stay.

      Greece will be an interesting test case. Migrants waiting on the other side of the Aegean must have gotten wind by now that they will get into chaos once they cross the Aegean. We'll see if that slows down the crossings.

  3. I don't understand the point of this article. Are we supposed to feel sorry for Austria? What? I don't get it.

    I don't know what to make of this immigration crisis either. I haven't even made up my mind about whether Syriza's policies contributed to the increased influx of immigrants/ refugees.

    I reckon it's best to view the whole debacle as another facet of the euro crisis. By now the Eurozone should have developed federal characteristics if it were to survive. One of those should have been structures to defend it's borders (the Eurozone borders that is), similar to how the US federal government (and not the states) protects the US borders. This not only would have solved the immigration crisis, but it also would contribute greatly to the amelioration of the economic crisis: these federal-like structures would not only relieve the over-indebted member-states from expenses they can't afford, but as investments they would also strengthen their economies (i.e. by building army-bases, refugee-camps etc).

    Of course the Eurozone has done none of those things, since it continues to believe that it can somehow have it's cake and eat it too. Sadly that is not possible and hence we are witnessing it's demise in real time.

    1. Jim,

      I am almost sure now that Syriza in their way have help increase the influx of migrants. Time will tell and prove this fact. This morning i heard a Mouzalas discussing the migrant issue and at the end of his statement he mentioned the necessity of acquire jobs as to handle the migrant issue as a whole. PUBLIC work jobs. I am thinking that maye they found a new way as to increase the public work force by using this migrant issue. The more migrants the mre public workers to process and hold them. More clientlism.

      I may be wrong but the Syriza government work in very enigmatic ways.


  4. Greece can still earn themselves some cheap Brownie points by offering to permanently take migrants in proportion to Austria. If they can do it without stretching their hand out for money they can earn even more.

  5. @ Nikos.
    You compare Austria's influx of 95000 refugees in 2015 with the influx of Albanians to Greece in the 1990es. Let's look closer at your figures and conclusions. The largest flow was 1990-1994 where 250000 Albanians came, corresponding to 62000 annually, or 0,63% of the population. The peak in stock was in 2008 where there were 459290 holders of Albanian citizenship in Greece, corresponding to 4,2% of the population. How many of these who were members of the Greek minority of Albania was never established, also, the total numbers were constantly in seasonal flux.
    Financially Greece did not cope with it. It was a loss of social contributions, the remittances were imports like cars, it was a lack of tax revenues, it was a loss of low income jobs (their previous holders being transferred to various state enterprises). Greece compensated by borrowing more money.
    Socially Greece did not cope, they got themselves a new class, the Albanians. A class that would do the work in farming and construction that no Greeks would do, a class excluded from social services of all kinds, a class not protected by the laws. A class you could sweep out with police operations "Broom" whenever the nationalist beast required it (or when it was payday). This is not a thing of the past, it still remains a stigma to be Albanian here.
    PS. In a weird way you are right when you state that Greece was "capable of dealing with it". That Albanians ended up with a stigma and Europeans with bad loans is another story.

    1. 1. According to the Albanian government, even in 2013 there were 574.840 Albanian immigrants in Greece:

      This despite the fact that 18%-22% of them had left Greece by then due to the crisis (again, according to Albanian sources):

      So even the "official" total number of Albanians in Greece (about 750.000) was huge. Greece did open its borders to Albanians - while Albania was not (and still isn't) exactly a friendly country.

      2. Albanians may have faced some racism in Greece, but they are partly responsible for it. I'm just going to say that 1 out of 4 prisoners in Greece is Albanian. In any case, despite all the problems, there are now hundred of thousands Albanians fully integrated in Greek society. Yes, many of them worked hard to achieve that, but the host nation deserves some credit too.

  6. A more relevant information would be: "How many % of criminals in Greece are Albanians"?