While the rest of Europe is still catching its breath after the tenuous migration deal with Turkey, Athens remains on the hook for the sizeable and increasingly desperate population of refugees and migrants now trapped in Greece. With the northern borders shut and Greek officials countering pressure from Brussels to send migrants back across the Aegean, over 50,000 migrants are now living in makeshift facilities in the European country worst equipped to help them.
Volunteers working in Thessaloniki recently raised the alarm over conditions “not fit for animals” at what are supposedly permanent housing facilities, with old factories and other repurposed buildings that lack both electricity and running water filled with tents pitched on dirty concrete. Another source of security concerns for the public has been the use of the Skaramangas shipyard as a makeshift housing facility, with nearly 3,000 people now living there and potentially as many as 7,000 arriving in the near future. The Skaramangas camp is located in close proximity to a sensitive military and industrial site, notably home to Greece’s Type 214 submarines. Ironically, the program to commandeer such sites for use as camps is being run by defense minister Panos Kammenos, who announced in February that the Greek military would be overseeing the response to the migrant crisis. The country’s struggles in dealing with the migrant problem, taken in conjunction with the sputtering economic recovery, have reinforced Greece’s uncontested claim to the title of “sick man of Europe.”
The unresolved migrant issue comes as yet another blow for Alexis Tsipras and his government, who have spent much of their time in power backtracking on onetime promises to undo the austerity regime. Just last month, they agreed to a whole suite of austerity measures equal to some 2% of gross domestic product and new taxes on fuel, tobacco, alcohol, hotel stays and cars. After vowing they would put a stop to the privatization of Greece’s bloated public sector, Tsipras and his allies rubber-stamped a buy-out of the Piraeus port (which is also being used to house thousands of stranded migrants) by Chinese shipping business COSCO and signed a major privatization deal with German airport operator Fraport, which now has a €1.2 billion contract to lease and manage 14 regional airports.
Even so, the Greek economy continues to limp ahead without major impetus for growth. The collapse now seems to have become the new normal: Greece has shed a quarter of its GDP since 2007, while the national unemployment level has teetered around 25% for four years and the youth employment level has been stuck at about 50% for even longer than that. The financial irresponsibility of past leaders and the halting reform efforts of the current government has led to a major brain drain, with the best, brightest and most ambitious leaving for new opportunities. Those left seem resigned to enduring life in a country that seems almost endemically mismanaged.
For their part, Tspiras and some of his coalition partners have always viewed the debt crisis through a prism of national pride. The prime minister is the same man who said the IMF bore “criminal responsibility” for his country’s cash crisis. His lieutenants’ language has not been that of negotiation, but defiance. It was Kammenos who rattled the nerves of the entire continent by ominously warning last year: “If Europe leaves us in the crisis, we will flood it with migrants, and it will be even worse for Berlin if in that wave of millions of economic migrants there will be some jihadists of the Islamic State too.”
In the face of statements like these, it’s understandable that markets remain to be convinced. The Piraeus deal was only passed after six months of torturous wrangling. Meanwhile, a gold mining initiative spearheaded by Canada’s Eldorado Group devolved into a highly-publicized spat between the company and Greek officialdom, while the fate of the aforementioned Skaramangas shipyards remains embroiled in a legal battle between the government and owner Abu Dhabi MAR. The government is planning to unify all the shipyards under one body and expropriate the owners of the shipyards.
Indeed, Finance minister Euclid Tsakalotos, is now putting into motion plans to nullify parts of the 2010 accord and force the shipyard to refund an “illicit aid” payment involving its previous owners. The debate over the Skaramangas shipyard has raised questions of potential involvement by competitor Nikos Tavoularis (owner of Elefsis Shipyards) who, according to a report in Parapolitika, has plans to take over Skaramangas and fold it into a unified shipbuilding industry with the government’s help.
For all these hurdles, Greece seems to be on the right track. The question is: will it last? The answer might be no. Syriza rose to power on a fervently anti-austerity ticket, with Tsipras positioning the austerity agenda as a foe that would be resisted and defeated. So far, he and his party have made concessions, but a continuing absence of growth could well see them revert to their old platform if cooperation comes to be seen as a losing strategy. Looking from the outside, the constant specter of Greece relapsing into unreliability is still enough to spook investors and international partners.
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