Monday, March 21, 2016

A To-Do List For Greece

The EU Commission published this press release on the EU-Turkey Agreement. It is a very interesting document because it clarifies several of the questions which many people undoubtedly have. Such as: What will happen to the refugees already in Greece? Answer: They will be relocated to other countries, at least 20.000 by mid-May.

Where the Agreement becomes overwhelming is where it stipulates what Greece needs to accomplish. Below is an extract:

The Commission estimates that Greece will need:
Around 4,000 staff from Greece, Member States, the European Asylum Support Office (EASO) and FRONTEX:
  • For the asylum process: 200 Greek asylum service case workers, 400 asylum experts from other Member States deployed by EASO and 400 interpreters
  • For the appeals process: 10 Appeals Committees made up of 30 members from Greece as well as 30 judges with expertise in asylum law from other Member States and 30 interpreters
  • For the return process: 25 Greek readmission officers, 250 Greek police officers as well as 50 return experts deployed by Frontex. 1,500 police officers seconded on the basis of bilateral police cooperation arrangements (costs covered by FRONTEX)
  • Security: 1,000 security staff/army
Material assistance:
  • Transport: return from the islands: 8 FRONTEX vessels with a capacity of 300-400 passengers per vessel) and 28 buses
  • Accommodation: 20,000 short-term capacity on the Greek islands (of which 6,000 already exist)
  • Administration: 190 containers, including 130 for EASO case workers 

Well, that's a bit more than a piece of cake. I suppose that the EU thought that any country which can pull off one of the greatest Olympics ever could easily handle such a to-do list. 

Let's hope they are right!

Tuesday, March 15, 2016

On The Biased Idomeni Perception!

The past 24 hours have made a major impact on my personal assessment of the refugee situation. The way I understood the situation before yesterday was/is: over 10.000 refugees were trapped in miserable camp conditions at Idomeni near the border. The Greek government had arranged for sufficient temporary quarters for refugees in other parts of the country. Most of the refugees refused to accept that offer from the Greek government.

Journalists seem to be all over the Idomeni area. They report on the miserable conditions; on the failed attempt to break a new trail towards Germany; on the sad drowning of two refugees; etc. They do not report on the buses on the Greek side, waiting to take refugees to other, satisfactory temporary quarters.

Yes, I am aware of how desperate - certainly with justification! - these refugees must be. That they are prepared to do just about everything to get to the Promised Land, Germany. But these refugees are not ignorant nor illiterate people. They know how to use iPad's and iPhone's. And because of that, they must be aware of the drama they are causing all over the EU these days.

To remain in contempt of the Greek government's request to move into satisfactory temporary quarters; to provoke a forbidden border crossing which entailed at least 3 deaths; to blast their self-imposed misery into every journalist's microphone --- well, that's not how Hungarian refugees behaved back in 1956.

Perhaps the difference is that Hungarian refugees in 1956 were escaping from Communist bullets behind them whereas today's refugees escape from miserable conditions in Turkey. But still: the behavior of today's refugees now has a smell to it.

Perhaps it is worth noting that the Geneva Refugee Convention of 1951 defined a refugee as someone who has reason to fear persecution because of "race, religion, nationality, membership in a certain social group or because of political conviction". War and/or civil war DO NOT qualify for refugee status under the Geneva Convention.

The EU developed its own "Refugee Policy Directive" which addresses those who are not eligible refugees under the Geneva Convention. They are called "subsidiary protection refugees". According to the EU policy, "subsidiary protection refugees" are not entitled to stay in the country. Instead, they are only entitled to temporary residence: one year at first, with another couple of years to be added.

Perhaps someone ought to explain to today's refugees that only a fraction of them qualify for refugee status under the Geneva Convention.

Saturday, March 12, 2016

Refugees & Growth

There is no doubt in my mind that, in the shorter term and strictly from an economic standpoint, the current refugee crisis will cause a small economic stimulus for the Greek economy. This, of course, presumes that the EU will keep its word and provide up to 700 MEUR to Greece over the next 3 years, 300 MEUR of which immediately. Those will be non-interest bearing, non-repayable funds. Subsidies, in short. And the second assumption is that the money which the EU provides will be sufficient, i. e. that Greece will not have to use its own resources for the purpose of handling the refugee problem.

The money which the EU transfers to Greece will, presumably, be spent primarily domestically. Temporary homes will have to be built, infrastructure for those homes, medical services, general shopping, etc.

Sweden and Germany are already showing that the 'refugee business' is quite an interesting new industry where many private players find profitable business opportunities.

As I have pointed out before, the trick will be that the money will be spent properly and wisely. Examples of unwise spending would undue profits of intermediaries or remittances by refugees of money they receive to their relatives in other countries. They wisest spending is when the money is spent on domestic Greek products and services.

As I said in the beginning, this is a short-term, economic view. The longer-term implications of having a huge inflow from the Middle East and Africa can be quite different.

By why should Greece not take advantage of the short-term benefits to the fullest extent possible?

Wednesday, March 9, 2016

Should Greece Give Up Sovereignty Regarding Border Controls?

Observing how Greece gets overwhelmed by the refugees, I asked two of my English-speaking friends in Greece for their opinion why Greece wouldn't say something like the following to the EU:

„Friends, we have reached the end of the line as far as the refugee problem is concerned. We no longer have answers and we certainly no longer have the capability to do what everyone says we ought to be doing. As you may recall, we have been bankrupt for a number of years, and still are. Since you have all the answers and all the resources, we pass the buck on to you. You are herewith authorized to do everything on Greek territory which you think must be done. Protect the borders better than we have done? Fine. Build more refugee homes than we have built? Fine. Make better registrations than we have made? Fine. If you want to have your ships in our waters to defend the border, fine. If you want to have tanks on our territory to shoot the refugees, fine. There is only one request (‚condition‘ is such a harsh word) we attach to our offer: please get rid of all refugees on our territory. We have never invited them nor do any of them want to be in our country. In fact, they see us as part of the problem and not the solution. And we certainly can’t afford to house and feed them.

Below are their reactions. As one may note, they seem to be saying the same thing but their conclusions are diametrically opposite.

Friend #1, a Brit living in Greece
„You mean that Greece should trade what little remains of its independence in order to survive? No, the Soviet Union of Europe would not agree to that. Far more likely is that it will unhinge Greece totally from the EU. After all, just look at a mapGreece is already totally detached geographically from the Eurozone, and Schengen. Even its only land border with the EU is Bulgaria, and they are not exactly totally enamoured with Greece at this point. Greece is not only currently being attacked by refugees emanating from Afghanistan, Iraq and Syria, it will shortly be attacked by an even greater volume from Africa. In my view, this will be the next calamity as Africans run increasingly from hunger, disease and political/religious turmoil. Where will they run to? Wealthy Europe, of course. Ok, many will aim directly for Italy or Spain but have you looked at a map of the Eastern Mediterranean to see how close Libya is to the southern coast of Crete? Why do you think that the water between the two shores is called The Libyan Sea?!? Look at Africa! Even Egypt is a domino ready to fall when the next revolution arrives. With a population of 80 million+, and growing by 2 million a year, and all packed like sardines in the Nile Valley. I remember that even when I worked in Cairo (2005-7), there were many sub-Saharan Africans there. Egyptian friends of mine merely said that they were Nubians from Northern Sudan, but I think that many were from further south. No, Klaus, the EU SSR will not entertain such a request from Greece nor will Greece openly kowtow to them. Greeks, I believe, will always want to retain some sense of independence, although this will be at a tremendous economic - and political - cost.“

 Friend #2, a Greek
"Couldn't agree more with Klaus' proposition and what David describes as the near- and midterm future to come is all the more reason to see Klaus' thinking as very logical!"

Friday, March 4, 2016

Refugee Subsidies Must Be Controlled!

As Greece can look forward to (well-deserved!) financial support from the EU to handle the refugee crisis, an entirely new perspective opens up: whenever money flows in large amounts to provide help, the question is whether all that money ends up in the places where it is supposed to end up. It is no secret that a good portion of EU subsidies for Greece, particularly agricultural subsidies, ended up in the wrong pockets for the wrong purposes. The Greek government is now challenged to do everything possible to assure proper usage of the refugee subsidies.

If Sweden serves as an example, there are probably already many entrepreneurial Greeks who ponder how to get a portion of the cake. The immediate financial help is said to be 300 MEUR. Those 300 MEUR which the EU will transfer will transform into income on somebody's part. One would think that it cannot be too difficult to trace and control the money which will be disbursed for proper application.

If Sweden serves as an example, one ought to be worried. As this article suggests, an entire private refugee support industry has developed in Sweden. In 2015, 150 MEUR were disbursed to private operators of refugee housing centers. The housing centers are of greatly varying quality. The major operators allegedly have a profit margin of 50% and more!

But it's not only housing where intermediaries will be able to make money. In fact, money is to be made wherever the above 300 MEUR flow. Assuming a multiplier effect of 7, that original 300 MEUR will eventually add up to over 2 BEUR in cash flow. If properly used, that cash flow will be in exchange for products and services delivered to refugees. The key question is how much of that cash flow will end up as profits on the part of intermediaries, in exchange for no value received. 

Wednesday, March 2, 2016

This Time It's Different!

In their famous book "This time it's different!", the authors Reinhart/Rogoff analyzed 'eight centuries of financial folly' and observed that every new folly was preceded by the conviction that this time it would be different.

Since 2010, there have been several occasions where Greece was seen 'on the brink'; 'headed for total collapse'; essentially 'headed for exstinction'. During such phases, I reminded myself what I had read about the history of Modern Greece. That there had been many phases where Greece seemed 'on the brink'; 'headed for total collapse'; or even 'headed for exstinction', only to re-emerge from all such phases in a stronger position than before. So I felt sure that this time it would not be different. Greece would not move towards exstinction, so to speak. Somehow, Greece would come out of all of this in a stronger position than before.

The refugee crisis has changed all of that, I am afraid, because the refugees won't disappear. And the fact will remain that Greece is geographically the closest and most easily accessible country to where the refugees come from. It remains to be seen whether any European country can effectively close its borders against a mass migration but it seems certain that Greece, because of its sea border, cannot. So whether or not Greece remains in Schengen, in the Eurozone or in the EU, for that matter, Greece will continue to be the first country (or one of the first countries) where refugees enter the European continent.

This is an awful perspective, reminiscent of a person standing on a beach, watching the huge tsunami approaching and knowing that there was no chance of escaping it. The only way out would seem that other European countries relieve Greece of all the refugees who land there but that scenario appears highly unlikely. It's one thing to send money to Greece knowing that it will most probably never return. It's quite another thing to take refugees from Greece knowing that they will never leave.

In fact, I can only think of one scenario where Greece could be spared the tragedy. If the Greek economic situation became really terrible (much, much more terrible than it already is), refugees might think twice before they risk their lives to enter a country where they would starve. But from the Greek point of view, that would only be substituting one tragedy with another one.

Regrettably, this looks like a no-win situation for Greece.