The Big Fat Greek Crisis

BY: DIYA CHADHA, CONTRIBUTOR

Over the past few decades, Greece has suffered from a far-reaching economic crisis. Most economists attribute the country’s primary fiscal downfall to the 2008 stock market crash, an event that impacted the economies of nations all across the globe. But unlike other European countries, Greece has not been able to fully recover from the crash. In the beginning stages of the crisis, overspending by the Greek government, widespread tax evasion, and large debts came to light. Since then, the state’s unemployment rate has continued to fluctuate, having fallen to 23.3% in April 2016. It’s clear to see that Greece’s economy has been damaged; but, whether or not the nation is being benefited or further harmed by the arrival of refugees from the Middle East is still uncertain.

As a result of the civil war in Syria, as well as turmoil in the rest of the Middle East, an influx of refugees have arrived in Europe. Whether it be by foot or by boat, approximately 5,000 refugees enter Greece each day, as per United Nations estimates. In 2016 alone, 158,722 refugees have escaped to the islands of Greece by sea. In 2015, 856,723 refugees arrived in Greece (also by sea), totaling just over 1 million known refugees. This is all due to Greece’s ease of accessibility for refugees – it lies directly across from Syria and North Africa and can be reached by land or sea. Turkey also experiences a similar impact from refugees, acting as a “gateway” to Europe and new opportunity.

In response to the rapid entry of refugees into Greece, as well as the rest of Europe, leaders have designed the EU-Turkey migrant deal. In essence, the plan was enacted in an effort to curb migration into Europe, where many political leaders deemed the crisis “uncontrollable,” and where refugees were met with backlash from the public. However, the plan is highly flawed and creates more problems than solutions. The deal states that all refugees will be assessed by authorities upon arrival to Greece. If deemed “irregular,” the refugee will be sent back to Turkey. Then, for every Syrian returned to Turkey from Greece, a Syrian migrant will be ensured resettlement in the EU. According to the Wall Street Journal, the number of migrants coming to Greece has definitely decreased. Coupled with increased control over smugglers, “only about 50 migrants a day, on average, have landed on Greek islands in May, compared with about 6,800 a day in October, at the peak of the migration surge.”

At the same time, inefficiency on the part of Greek officials has delayed the effectiveness of the deal. As of May 2016, hundreds of asylum claims still need to be processed, while another 7,000 claims are expected to be submitted in the near future. And as a result of the time it takes to send refugees back to Turkey, camps in Greece have been filled beyond capacity. Further, the overcrowding of Greek camps has led to violence among refugees. At a detention center in Lesbos, migrants actually set fire to the container that they had been living in. In reality, the EU-Turkey deal has “locked” migrants in Greece, causing the already poor nation to spend more money on facilities for refugees. This is due in part to the fact that a majority of the spending from the deal is going towards Turkey, rather than Greece. This doesn’t help because few of the refugees are actually returning to Turkey (as of now), having filed appeals against decisions made by Greek authorities in relation to the Migrant Deal. For the cleared refugees trying to rebuild their lives in Europe, Greece acts as a road block. Most plan to travel further north/west to join family and friends, or to establish themselves in a more financially stable nation.

“It is certainly a humanitarian crisis. The refugees want to continue from here up north, but they are not able to. Let me be very clear: we need to provide these people with proper accommodation here. Greece must defend the human face of Europe, no matter how many refugees are coming. But we demand a fair distribution. Greece cannot turn into a permanent warehouse of human souls who do not want to be here.”

Alexis Tsipras, Greek Prime Minister

Refugees have also impacted a vital industry in the Greek economy: tourism. Of the nation’s $286 billion GDP, 18.5% can be attributed to revenue from tourism. Originally, it was thought that Greece’s tourism sector would suffer as a result of refugees in the country, and this is true; at the peak of refugee arrival earlier this year, revenue from tourism in Greece declined. According to The Guardian, “hotel pre-booking is down 45%-50%, cancellation rates are 20%, and there are just 25 cruise ships set to dock this year, compared to 46 in 2015.”

More recently, however, the island nation’s tourism industry has prospered. It is widely believed that Greece will gain the tourists that Turkey is losing as a result of increased tension in the nation. According to Bloomberg, “The Greek Tourism Confederation expects the number of visitors to rise to a record 25 million this year and bring 800 million euros ($897 million) of extra income. Separately on the same day, Turkey’s Culture and Tourism Ministry reported a 10 percent drop in year-on-year arrivals last month, the most in a decade.” In this sense, the EU-Turkey migrant deal has benefited Greece’s economy now that tourists are more comfortable traveling to Greece because of the decreasing number of daily refugee arrivals.

Photo Credits: By Ggia (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons