Yahsue dear readers!
As you may have guessed that is Greek (in the English alphabet anyways!) for hello. I hope my Greek readers can forgive me for this laziness!
Today is the day I turn to Greece. I have been meaning to head into the southeast corner of our beautiful European continent for a while.
Greece has for a long time been in the headlines for its tough and seemingly never ending economic crisis. We are now in the seventh year of the crisis by my reckoning. For the merchants of doom (read Eurosceptics!) they have made numerous pronouncements that this is the end of the road for Greece as part of the European Union and Eurozone. With great steel and resolve it has survived.
On top of this crisis Greece last year found itself at the forefront of a massive refugee influx, one it had been struggling with before 2015, but which finally hit the headlines a year ago. Greece has shown remarkable heroism in handling the large numbers, with generosity and individual acts of extraordinary compassion, such as hosting refugees for free in their houses and providing food and washing facilities. Only Germany showed such care. An important mention must go out to the heroes on the Greek islands who have swum out to sea to rescue those refugees whose flimsy boasts capsized in the Mediterranean waters as they made their difficult way to Europe. It is important to note that this deep seated humanitarian streak was in stark contrast to the Hungarian and other Eastern European responses of closing borders and patrolling them with attack dogs.
Let us first turn to the economic crisis though. In 2015 the Greek people suffered the trauma of seeing two general elections, nail biting parliamentary votes, a tight referendum, closed banks and a colossal refugee crisis. In August 2015 the Greek government, led by Alexis Tspiras, managed to secure financial assistance with a bailout programme worth €86 billion over three years via a troika of creditors, including the IMF and European Central Bank. Whilst these loans provide a temporary bridge to cover outstanding debts the burden has fallen sharply on Greek households. Under the terms of the bailout there is a clause specifying a €35 billion ‘Jobs and Growth Plan’ to invest in people and businesses, the European Commission outlines, but only by 2020 once obligations have been fulfilled.
Greece has endured one of the harshest austerity programmes in history. According to the OECD, Greek household income has fallen by almost 33% since 2008, and youth unemployment has reached almost 50%. A ‘brain drain’ of well educated and creative young Greeks has taken place as they head to the UK, Germany, USA or Australia. I am no critic of austerity in principle but it is now time to ask some big questions. Granted other Eurozone states, such as Ireland and Cyprus, had both needed bailing out but they have since recovered and have exited their plans.
Massive cuts in government spending and sharp tax rises in Greece have taken their toll and having initially supported the austerity measures I think it is now time to invest back into the Greek economy, much sooner and much deeper than 2020! This is now Greece’s third bailout programme since 2010 and differing interpretations of what the responsibilities of the Greeks and creditors are has led to deadlines being postponed over crucial reforms and debt repayments. This July should see a reassessment and a crucial decision taken to further integrate fiscal policy in the Eurozone and a politically difficult but maybe necessary substantial debt relief or ‘haircut’ measure adopted.
This is the argument put forward by Mr Tspiras in a recent interview with pan-European Euronews television channel. He argued that in 2016 we might start to see the end of negative GDP growth rates (the World Bank recorded -3.3% in 2013!) and stressed the Greek economy is one step away from recovery if agreement can be reached with the ‘troika’ over this. Certainly Eurostat, the EU’s data collection and analysis organisation, has shown that government revenues were up by 0.7%, unemployment fell by 1.5% and in spite of refugees arriving on the beaches and in hotels, tourism – a core earner for the Greek economy, remained stable. The left wing leader has a strong case to argue but whether it will be enough to satisfy the creditors remains to be seen. A special mention should go to Chancellor Angela Merkel, who despite being made a scapegoat for anger over austerity, defied some European leaders calls for the forced expulsion of Greece from the Eurozone and helped forge a deal when the odds were so heavily stacked against her. In the biography about her written by Stefan Kornelius, it is mentioned that, alongside the USA, Greece is Ms Merkel’s favourite country and she used to backpack across the country as a young girl.
With regard to the refugee crisis, Greece saw over a million enter last year and mercifully the chaotic ‘Balkans route’ has shut down and Greece, with EU assistance, managed to get four out of five refugee processing centres built in record time (causing chagrin among those who bear the Greeks no goodwill) to coincide with the ‘one in one out’ EU-Turkey deal. In spite of historic differences and hostilities Greece and Turkey have so far managed to co-ordinate and implement the deal, again defying the doom merchants, and this high level of communication might actually help to ease tension over divided Cyprus. The Greeks have overwhelmingly and touchingly responded compassionately to the newcomers but as the Greek Human Rights Commission noted there were 273 incidents of racial attacks last year, up from 81 in 2014. This is still relatively low given the numbers of refugees involved and the numbers may have increased due to better data collection methods. We must continue to be vigilant though, and a hearty congratulations and practical support should be extended to the Greeks in this difficult time.
Alexis Tspiras, leader of the Syriza left wing party and current Prime Minister, is vulnerable and has a lot riding on the flexibility of his creditors. The well regarded , English language Greek Reporter news website reported a poll showing that if general elections were held today the government in Athens could fall and revert back to the conservative New Democracy Party which governed from 2012-2015. Polls indicate Syriza (16.5%) is eight percentage points behind New Democracy (24.5% – credit goes to their new leadership) and thankfully the fascists of Golden Dawn (whose leadership is currently on trial for running a criminal organisation) are on only 6.5%, at the same level as the Greek Communist Party. The once ruling PASOK socialist party is decimated at a measly 4%.
Greece has drawn on huge reserves of resilience and come out of the other side. Tricky reforms will be necessary further along the line, in the areas of pension pots and tackling red tape and corruption, but what is now needed is a show of courage by the troika to relieve some of the burden on the Greek nation, to show the sacrifices of seven years have not been in vain and restore much needed confidence to Greece. The refugee crisis has altered the equation and ( like I have done) it is now time for decisionmakers to take stock, cut the Greeks some slack and return them back to the centre of the European project, where they rightfully belong.