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.


  1. Mr. Kastner,

    My grandfather who lived through many of the modern Greek trying times always told me in a greek, "the darkest hour is always before dawn."

    I always think of him and his mannerism to patience and maintaining composure, especially in this new difficult period. Unfortunately the dark hour seems to linger along. Meanwhile even when it seems dawn may come, it feels like we live in northern finland in mid winter (metaphorically) where dawn and dawn light last for an hour and once again we are in the dark.

    In retrospect, I think now that maybe my grandfather really meant that dawn will never come. That one must train themselves to live in the dark as to find some kind of enjoyment in life.

    I am over 40 years of age and there is no real period where general society has prospered. From the early 70's till today it seems that in both USA and Greece it has been back to back crisis. Even the boom periods of the 90's,, and the greek financial good days periods, were unholly to me and i consider them as crisis.

    Can society as whole not find a common medium balance? Or are we doomed to go from crisis to crisis with some short periods of superficial peaks?

    In my work, one main objective or underline of my job is to seek sustainability. The word is very general when taken from contexts but it means alot. From Economical, Environmental, Social responisibility, Market, Supply and end contribution. I think the general public and more so the leaders (politicians and elite) do not have a conception of what sustainability means.

    As annoying that you may have been at times with your economical, social or observations of greece, from an accountant pov, i always see the underlining of your words which has great level of sustainability. And it is one of the reasons why i follow you.

    So i reply to you above no win situation, yes you are probably right, but history has shown we can hope for something better. Maybe it is plain societies karma to live in the dark with the idea of hope.


  2. Manolis GeorgiadesMarch 2, 2016 at 10:52 AM

    So in a state of panic, throwing family members we dislike (for any reason) off the boat is moral and legal?

  3. "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."

    I am not convinced.

    The following post reminds us of Syriza's pre-election campaign:

    Among other interesting things Syrza's program states:

    "Γι' αυτό βρισκόμαστε στον αντίποδα μιας λογικής που ορθώνει την Ελλάδα-φρούριο, την Ευρώπη-φρούριο, και υποστηρίζουμε το δικαίωμα στην ελεύθερη και ασφαλή είσοδο και το άσυλο."

    "We oppose barriers in Greece and barriers in Europe, we support free and safe entrance for immigrants/ refugess."

    It seems obvious that Syriza campaigned in favor of an open-border policy. Who's to say that it didn't implement it? The massive influx of immigrants/ refugees suggests so. It wouldn't be the first mistake that Syriza did.

    1. I assume that's a reference to alleged "pushbacks" by the greek coastguard during 2013-2014. (You can google some survivors accounts easily).

      There were credible allegations of italy doing it too, before the NGO's began more intrusive monitoring. It's illegal, a clear breach of the 1951 Refugee Convention (Articles 32 and 33)

      It's possible, of course, that Syriza has an ideological commitment over and above international law to giving refuge. It would hardly be surprising. Many ex-communists in Greece have periods of exile in their biographies.

    2. @ Anonymous at 6:19
      You seem to have the Geneva Convention on hand. I would be curious what kind of 'force majeure' or 'emergency situation' clauses there are in the document. It would be highly unusual if there weren't. If 5 million refugees were to go to Malta, Malta must have the right to protect its own survival. I find it interesting that, contrary to what everyone else says, the Austrian government has said to have legal advice that it is acting with the law, treaties and conventions. They don't reveal the details, though. Any agreement can be challenged by lawyers. Lawyers found a way around many things in the last years such as the no bail-out clause or the ECB prohibition to fund governments. I would be interested to know the vulnerabilities of the Geneva Convention, if you are in a position to provide details. Thank you.

    3. no, sorry I'm not a lawyer. You can find references to the protection provided by Articles 32 and 33 by searching for "non-refoulement", and the UNHCR has a good site on the treaty:

      which includes all the national reservations.

      As far as I know, (the wiki article on non-refoulement), the Australian argument for it's offshore asylum-policy being legal, not refoulement, is that it's only refoulement if they are in the national territory. At sea, they can be taken elsewhere.

      Obviously, that only applies to a sea border, not a land border.

    4. I agree with our blog author. This comment must be commented upon.
      The short answer is this: the comment by Jim Slip is correct but irrelevant.
      First the correct part. It is true that SYRIZA was spewing shit about accepting all refugees and giving them papers to go
      anywhere they wanted. Just like the Greek Communist party is saying now. They were trying to pull down the metal fence
      at Evros, for example. Obviously the time honoθred incompetence of the Greek state, coupled with the almost certain effort
      by some ministers to ignore the problem because it seemed that the refugees were leaving quickly, makes Greeks guilty of
      making the problem worse. This has created a huge political problem, both for PM Tsipras and the EU leadership, as it makes
      arguments like the one above look very respectable. However reality conspires to make things far more difficult.
      The irrelevant part now. The Aegean is impossible to guard effectively. Take that from a man that has shot people in Aegean
      shores, participated in war games with Greek UDT's, US SEALS, UK Special Boat Section and other NATO Special Forces and
      intercepted refugees coming from Turkey-at the time Kurd far leftist in minute numbers. This makes all statements about stopping the refugees irrelevant: if they start to come they cannot be stopped, irrespective of how efficient the interception is. Explaining this is very difficult and we are left with the impression, just like Jim, that it is SYRIZA's fault. However because of the impossibility of guarding the shores PM Tsipras has a lethal counterargument: if you think you can do it bring your people down here and do it yourself. Nobody dares, resulting to a political stalemate.

    5. Now I will try to explain why it is impossible to stop the refugees. Bear with me as we get technical and analyze the operational details of an interception operation.
      A) THe Aegean is the second largest Archipelago on Earth. Greece has 4500 islands in the Aegean and more shoreline than the rest of the EU put together. More than the Continental US. The land borders are 3500 Km long, many with impossibly difficult mountains known to eat armoured brigades between breakfast and lunch.
      B) Smuggler routes and networks operate in the area for millenia.
      C) The Aegean is ideal smuggler area, with an incredible amount of dead corners-areas where there is no direct or indirect line
      of detection or fire -. These dead corners are both from the air and the earth's surface simultaneously. No radar or aerial
      surveillance can locate reliably small targets in the Aegean.
      D) Distances are small. I have personally swam without flippers distances longer than the ones between the Turkish shore and
      some islands. The window of detection and interception for a powerful boat between Turkey and some islands can be less than
      30 seconds, as some boats and jetskis can make 60-80 knots in the summer seas. To intercept reliably you will need a non
      realistic number of frigates and helicopters.
      E) There are two ways to intercept a boat that does not obey orders: e1) shoot it or e2) force it to stop by ramming it if you are of bigger tonnage. But these boats are essentially floating coffins. Touch them and they go down. Causing a shipwreck under these circumstances is a serious crime. Then once the refugees are in the water you must collect them. Ignoring shipwrecked women and children that you created is one of the very few crimes still punishable by death globally(in theory anyway), under most Naval Codes and Admiralty law. Keep in mind that the laws of the country of the ship's flag are not necessarily relevant: you can be sued under Admiralty law everywhere. Once the refugees are on board they are the legal responsibility of the country to which the ship is flagged, so no taking them back to Turkey and, in theory at least, no taking them to Greece. And all this is before the global opprobrium that the inevitable movies of such actions will bring upon the flag of the vessel committing them.
      F) Now let's move to e1) or the case where refugee boats are routinely rammed and people are left to be drown. There are
      some things about military forces that are not talked about in polite society. One of them (there are several) are mutinies. Units that are forced to do unpleasant things mutiny. One of the things known to cause mutinies is forcing the unit to commit atrocities. IN MY CAPACITY AS A FORMER SPECIAL OPERATION OFFICER I CAN TELL THAT MUTINY, MASSIVE DISOBEDIENCE OR MYSTERIOUS OFFICER DEATHS WILL SOON BECOME RAMPANT IF YOU ASK PEOPLE TO COMMIT ATROCITIES. Conscript forces, like the Greek
      ones, are particularly vulnerable to this. However this is not a Greek or conscript problem. The SAS mutinied during the 1982 Falklands war with the immortal line that "we will not die because M. Thatcher needs fancy PR". And all this before the global PR disaster.
      G) Hot pursuit is out of the question. It will bring forth all the Greek-Turkish disagreements.
      H) Small boat traffic -with bathtub sailors on board- during the summer is significant. The possibility of wrong arrests or serious
      accidents is uncomfortably large. If the small boat traffic is disturbed expect the locals to turn hostile to the operation, as it will influence tourism.

    6. All the above explain-especially E and F- why, as long as refugees arrive, they cannot be stopped. I agree that the Greek government could and should have done more, but the scale and nature of the problem is such that we will still be in the same mess. Any SYRIZA policies, either to stop or accelerate the flow, are irrelevant. The flow is so big and difficult to stop that no realistic Greek policy can influence it. They also makes clear the power of a statement by PM Tsipras along the lines: We agree we cannot deal with the problem. Please Austria, Visegrand, whatever send your coast guard to do the shooting.

      However the refugee situation does not pass the smell test. Why the refugees do not cross the borders in Bulgaria, which is
      an interEU border and therefore much more difficult to close? Why they do not simply bypass the FYROM wall, which does not cover
      the whole Greek-FYROM border? How can anybody explain today's statements by Italy PM Rentzi that he is worries about
      refugees that are crossing from Greece to Albania to Italy by boat and he is taking protective measures to stop the flow? Is
      he trying to persuade us that refugees are moving west from Idomeni, cross some of Europe's most difficult mountains and then
      50 miles of open, winter sea instead of walking a few kilometers east to an open border in Bulgaria? Can anybody explain the strange statements by the FYROM FM: there might be war in the Balkans, Greece cannot be forced to carry the whole load, that the EU is forcing them to keep the border close? The unofficial line pushed by Greek politicians towards the lower echelons of politics and the state apparatus is that Austria has a deliberate plan to destroy Greece. Can you take these things seriously? Is it possible for Austria and the Visegrand group not to understand that forcing 200000 refugees in Greece will destabilize Greece and FYROM,
      possibly Albania and Bulgaria as well, creating a Balkan refugee flow towards the north like the 1990's? Is somebody not telling the whole truth?
      To close this diatribe are we sure that the people smugglers are Turkish or predominantly Greek? News reports and my business intelligence from Lesvos is telling me that the smuggling gangs are overwhelmingly Greek, something that would explain a lot.I am investigating. Stay tuned.

    7. @kleingut

      You may be interested in "COUNCIL DIRECTIVE 2001/55/EC of 20 July 2001
      on minimum standards for giving temporary protection in the event of a mass influx of displaced
      persons and on measures promoting a balance of efforts between Member "

      Contrary to what I thought it already plans for sharing refugees between all member states in case of a mass influx of displaced persons. I can't guarrantee the directive is still valid but I don't think Dublin I/II/III replaced it

      I was also surprised that UK opted in the application of this directive, whereas they consider they don't have to in the present situation:
      (24) In accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and to the Treaty establishing the European Community, the United Kingdom gave notice, by letter of 27 September 2000, of its wish to take part in the adoption and application of this Directive."

  4. I disagree. Here's why.

    I've seen Greeks recently online expressing their pride in their country. Because it holds to its values, even in extreme conditions. That Greeks who are themselves in dire economic straits volunteer and contribute to somehow master the wave that has swept over them.

    That's a kind of patriotism I approve of. One of shared values and shared action. Much better than the frequent and rather wierd evocations of Thermopylae (hint: a zero-interest emergency loan is not an invading army) over the past few years during the financial crisis.

    That sense of "organised togetherness" is called by sociologists "social capital". In measurements, Greece's social capital has been very low. Hence widespread tolerance of tax evasion "because everybody is at it".

    This crisis may be the making of Greece.

    It appears the EU will be granting money rapidly and without intrusive monitoring, to help combat the coming humanitarian disaster. That's good too.

    I also found this summary by austrians living in Greece, rebuking their own politicians, to be right on target.

  5. Greece has always been a crossroads for migrants, that is a geographical fact. That Greece has managed to be on enemy terms with all of her 4 neighbors for the duration of her existence is sheer stupidity, it contributes to her present predicaments. No European nation can match that record.

    1. Bullshit! Apart from misstrusting Turkey (and rightly so) Greece isn't on enemy terms with any of its surrounding states, and that is true even when it comes to FYROM. Neither of course do we have to apologize if our northern neighbors advance, in their turn, "that is a geographical fact" arguments to mask the fact that they act out of pure self-interst (lets not forget it, with northern back-up ...), nor is Europe justified to demand from Greece to turn itself into a huge concentration camp, out of which richer nations will get to cherry-pick the ideal candidates for asylum, wailing all the while about the huge burden they generously take up just so that they will relieve us and chastising for the predicament we supposedly got them into, just because we'have always been a crossroads for migrants and "that is a geographical fact". RealpolitiK and self-rigtheousness don't mix together; things change however if you add nationalism to the mixture, since then you've achieved pure hypocrisy.

  6. I really don't understand why hosting some refugees in Greece with subsides of the EU will be a disaster.
    The subsidies are going to feed the local economy and boost GDP and growth, which Greece needs currently.

    I do get the point that Greeks don't want their country transform in a gigantic refugee camp, but we are very far from this situation currently: Taking Austria metrics, Greece would be providing permanent residence to 120k refugees.
    Greece govt can not absorb the bill, then let's EU (or EU members who host less refugees) take the bill, and EU is clearly willing to.

    I don't fault Greece or its current government for the Middle East refugee crisis, neither is it EU fault that Greece is at the crossroad between Europe and Africa (Greece was the crossroad before EU)

    1. There is no doubt that the "refugee business" can and will become a very profitable business for many creative entrepreneurs. I recently read that, in Sweden, the state paid out 150 MEUR to private operators of asylum homes and, according to the article, those operators work with profit margins up to 50%.

      If the German state has to spend 10 BEUR this year for the refugees, it serves well to remember that expenses of the state are revenues for privates. Germany, though, will have to make such payments out of its own revenues or fund them with new debt.

      Greece, on the other hand, gets that money free of charge, so to speak. A subsidy. One can only hope that this money will be spent on Greek products, on Greek building companies which employ Greeks, etc. etc. And above all, one can only hope that the money gets to where it is supposed to get.

      So all of this could be great fun for Greece if the number of refugees were to stay at 100.000 or not too much more. That, however, is an illusion in my opinion. I have yet to hear of a good reason why, once the weather gets better, fewer people will cross the Aegean than the year before. If it was over 1 million in 2015, it will likely be close to 1,5 million (or more) in 2016. And then it will cease to be fun, regardless how much money the EU send to Greece.

  7. I wish there would be comments on Jim Slip's comment of March 2 at 5.20 PM. Personally, I think that's a really important point!!!

  8. I paste a tweet I read today. Fits with the subject of your post:

    Ed Conway ‏@EdConwaySky 12m12 minutes ago
    This may surprise you
    Asylum seekers per million inhabitants, 2015
    UK 591
    Greece 1,047
    EU 2,470
    Germany 5,441
    Sweden 16,016
    Hungary 17,699

  9. I don't think Syrizas migration policy has influenced the number of migrants. The international aspect was from the beginning a part of Syrizas program, in as far as they had a program. That part of the program was quickly played down as they realized they also needed the nationalist voters. Syriza are suffering the problems of running a populist government without money. They have to satisfy too many clients, rich/poor, academics/workers, Peloponnesus/Attica, private/public, and each government member has his own voters. To make all these groups happy you need to have so many laws, rules and exceptions that you can convince all that they have preferential treatment. You also need to have money to distribute, to many small groups, for many fictive services, that makes the system intentionally opaque. For these reasons all Greek governments try to avoid the Quadriga's recommendations of , uniform pay scales, a minimum income and no benefits and exceptions.
    You can't loose voters with the nationalist argument. "we all deserve better but the others will not let us realize our potential". This card is being played now on the Macedonian border, with the migrants as hostages. That situation is not caused by the farmers, tax cheats, oligarchs or civil servants, it is caused by the others. It would be a lot cheaper and less risky to board and feed the migrants close to Attica, but it would not have the same propaganda value, a fringe benefit is that the Macedonians are now shown as the heartless barbarians they are.
    I agree with Jim Slip that the EU/EZ is finished in its present form, the sooner we start to plan, based on that, the more of the good things we can salvage.
    When it closes down everybody will look for the defining moment. Mine was in 2015 when a member nation voted themselves owners of other nation's wealth.

  10. I don't think that Merkel's famous words "we can handle that" has influenced the number of migrants. Since her words were taken on face value, she may have changed the timing slightly. It took a more realistic Schauble to qualify her words with "even our possibilities are not unlimited".
    Neither do I think that Merkel's words "there is no alternative" created AfD, it only named the party and changed the timing. Again it took a more realistic Schauble to correct the misunderstanding that Greece did not have to follow the rules since neglecting them would not have consequences. He did that with his famous words for Greek alternatives in the summer of 2015.
    I see no way that Greece can stop the flow of migrants, a united Europe may be able to reduce it temporarily (competently explained by theAthensdog elsewhere). I do not share the great hopes for a Turkish intervention, a possible deal with Turkey will be an ongoing (a modern Scheherazade) bazaar deal just as expensive as the one Europe is having with Greece. since we are not going to have a united Europe I foresee smaller "Schengen" areas where the borders can be safeguarded and members have the same values.
    A defining moment for me in the migration crises was when Poland said no to receiving migrants. A country with 39 million citizens and 750.000 in Germany and another 750.000 in the UK. A nation where I have lived twice, each time one year, in bad and good times?
    PS. We have not discussed the problem of keeping the migrants where we (maybe) agreed to place them, they may disagree with us. Neither have we mentioned what we will do with a homosexual migrant from a country where that is a crime.
    Don't worry, the dream will be over before we get that far.

  11. The previous benefactor of migrants, A. Tsipras, will now save Europe by stopping the "unbearable flow of emigrants into Europe". I thought that had stopped when the northern borders of Greece were closed.