Tuesday, September 8, 2015

Greek island of Lesbos 'on the verge of explosion' with more than 15,000 asylum seekers, minister says


Syrian refugees arrive on the Greek island of Lesbos Photo: A Syrian refugee (L) carries two children after arriving on a dinghy on the Greek island of Lesbos. (Reuters: Dimitris Michalakis)

Related Story: Britain and France vow to accept tens of thousands of asylum seekers

Map: Greece

The Greek island of Lesbos is "on the verge of explosion" with the arrival of more than 15,000 mainly Syrian asylum seekers pushing local resources to the limit, the immigration minister said.

Yiannis Mouzalas said that boats taking asylum seekers to the Greek mainland would soon be using a second port to ease pressure on the island of 85,000 inhabitants.

"Mytilene currently has 15,000 to 17,000 refugees and this is the official figure from all services," Mr Mouzalas said.

[The asylum seekers] are very aware that Greece has an economic crisis ... they're not looking to impose themselves, they're just seeking a better life

Kate O'Sullivan, communications officer for Save the Children in Lesbos

"We are placing emphasis here because the situation is on the verge of explosion."

The minister said the second departure point would open at the fishing village of Sygri in coming days.

Lesbos is one of several Greek islands struggling with an influx of thousands of migrants, many of them Syrian refugees, setting sail from the nearby Turkish coast.

Video: Save the Children's Kate O'Sullivan discusses the situation in Lesbos. (The World)

"We hope that in the next five days the [islanders] and the refugees will see clear signs of improvement," he said.

Kate O'Sullivan, a communications officer from Save the Children's emergency response unit, recently ABC's The World program that the vast majority of asylum seekers arriving in Lesbos were landing in Lesbos with the intention of heading further into Europe.

"Everybody I speak to, most of them want to move on [to other European countries], they're very aware that Greece has an economic crisis," she said.

"They're not looking to impose themselves, they're just seeking a better life."

There have been clashes on Lesbos in recent days between police and migrants, and between migrants of different nationalities, over delays in the registration process that have held up their journeys on to other countries in Europe.

Syrians have been granted priority in the registration process, sparking tensions with other migrants forced into long waits on the island.

More than 230,000 people have landed on Greek shores this year, with the numbers soaring in recent weeks as people seek to take advantage of the calm summer weather.

Asylum seekers on Lesbos island Photo: Refugees and migrants wait for a registration procedure at the port of Mytilene on the Greek island of Lesbos. (Reuters: Dimitris Michalakis)

From other news sites:

Greek island of Lesbos 'on the verge of explosion' with more than 15,000 asylum seekers, minister says - ABC News (Australian Broadcasting Corporation)

Thursday, September 3, 2015

How Greece Can Help Itself

By James Surowiecki

Credit Illustration by Christoph Niemann

If there’s one message that Greece should take away from its recent confrontation with the euro zone, it’s that it will never get the help it really needs. Assuming that the deal goes through, Greece should be able to reopen the banks and keep the economy from total collapse. But, with that economy having shrunk by a quarter in five years and an unemployment rate over twenty-five per cent, it needs real stimulus spending and a much looser monetary policy. Neither is on offer. Even if Greece gets the debt relief that the I.M.F. is recommending, the next few years will be grim. As James Galbraith, an economist at the University of Texas at Austin, who assisted the former Greek finance minister during this year’s negotiations, told me, “What’s going to happen in Greece is going to be very sad.”

So what can Greece do? It really has only one option—to make the economy more productive and, above all, to export more. It’s easy to focus on Greece’s huge pile of debt, but, according to Yannis Ioannides, an economist at Tufts University, “debt is ultimately the lesser problem. Productivity and the lack of competitive exports are the much more important ones.”

There are structural issues that make this challenging. Greece is never going to be a manufacturing powerhouse: almost half of all Greek manufacturers have fewer than fifty employees, which limits productivity and efficiency, since they don’t enjoy economies of scale. Greece also has a legal and business environment that discourages investment, particularly from abroad. Contractual disputes take more than twice as long to resolve as in the average E.U. country. Greece has been among the most difficult European countries in which to start and run a business, and it has myriad regulations designed to protect existing players from competition. All countries have rules like this, but Greece is an extreme case. Bakeries, for instance, can sell bread only in a few standardized weights. Recently, Alexis Tsipras, the Greek Prime Minister, had to promise that he would “liberalize the market for gyms.”

The scale of these problems makes Greece’s task sound hopeless, but simple reforms could have a big impact. Contrary to its image in Europe, Greece has already made moves in this direction: between 2013 and 2014, it jumped a hundred and eleven places in the World Bank’s “ease of starting a business” index. And reform doesn’t mean Greece needs to abandon the things that make it distinctive. In fact, in the case of exports, the country has important assets that it hasn’t taken full advantage of. Greek olive oil is often described as the best in the world. Yet sixty per cent of Greek oil is sold in bulk to Italy, which then resells it at a hefty mark-up. Greece should be processing and selling that oil itself, and similar stories could be told about feta cheese and yogurt; a 2012 McKinsey study suggested that food products could add billions to Greece’s G.D.P. Similarly, tourism, though it already accounts for eighteen per cent of G.D.P., has a lot more potential. Most tourists in Greece are Greek themselves, a sign that the country could do a much better job of tapping the booming global tourism market. Doing so would require major investments in improving ports and airports, and in marketing. But the upside could be huge. Greece also needs to stem its current brain drain. It produces a large number of scientists and engineers, but it spends little on research and development, so talent migrates abroad. And there are other ways that Greece could capitalize on its climate and its educated workforce; as Galbraith suggests, it’s an ideal location for research centres and branches of foreign universities.

To implement such changes, Greece will have to overcome other problems. Reforms work best when the level of trust in political institutions is high. But the Greek state has a poor reputation among citizens, who see it as a pawn of special interests. (This distrust of the government is one reason for the country’s notoriously high rate of tax evasion.) On top of this, the chief advocate of structural reform to date has been the much hated troika, whose obsession with austerity has made the mere notion of reform anathema. Opening up the Greek economy would benefit ordinary citizens, since the economy’s myriad rules and regulations serve mainly to protect the wealthy and those lucky enough to have won a sinecure. But that’s a hard sale to make at a time when people are worried about holding on to what they have.

Nonetheless, it’s a sale that Alexis Tsipras should try to make. As Ioannides told me, “We know from looking at other countries that, for reform to work, the government and the public really need to own it.” Right now, no one in Greece really owns reform. Still, Tsipras has considerable political capital. He could use that capital to spend the rest of his time in office inveighing against austerity. But Germany has made it painfully clear that that will have no effect. Instead, Tsipras should forget about what Europe isn’t going to do, and focus on what Greece can do for itself. He should make the case for why Greece needs to focus on exports; make it easier for young people to find jobs and start businesses; and even allow loaves of various weights and liberalized gyms. This isn’t the platform that Tsipras ran on. But it’s the platform that Greece needs him to govern on. ♦

How Greece Can Help Itself - The New Yorker

Wednesday, September 2, 2015

Tsipras and Varoufakis: a messy split for Greece's double act

By Yannick Pasquet (AFP)


© AFP/File / by Yannick Pasquet | Alexis Tsipras swept to power in Greece in January 2015, hiring maverick economist Varoufakis as his finance minister

Alexis Tsipras and Yanis Varoufakis shared a vision once, but the double act of the Greek debt drama's most colourful characters now appears well and truly over.

When Tsipras swept to power as prime minister in January, hiring maverick economist Varoufakis as his finance minister, both vowed to stand up to Athens' much-loathed creditors and bring an end to the austerity they blamed for strangling the Greek economy.

With a shared love of motorbikes and a hatred of neck-ties, they were the fearsome twosome who took Greek politics by storm.

But eight months later, with Greece facing snap elections in which Varoufakis refuses to run, the rift between the pair is growing uncomfortably public -- even if analysts say it is unlikely to do Tsipras much damage as he seeks a fresh mandate at the head of radical-left party Syriza.

The polls on September 20 will be "quite sad and fruitless", Varoufakis told Australian broadcaster ABC.

Former Greek finance minister Yanis Varoufakis attends a parliamentary session in Athens on July 15 ...

Former Greek finance minister Yanis Varoufakis attends a parliamentary session in Athens on July 15, 2015 Louisa Gouliamaki, AFP/File

"The party that I served and the leader that I served has decided to change course completely and to espouse an economic policy that makes absolutely no sense."

Tsipras quit on August 20, triggering new elections, after a major rebellion within Syriza over Greece's huge third international bailout left him barely able to govern.

Varoufakis had resigned six weeks earlier, a day after Greece's referendum on the proposed bailout, and as negotiations with the creditors -- the EU, IMF and European Central Bank -- grew increasingly bitter.

His confrontational tactics had infuriated the creditors for months, and in a blog post announcing his resignation he said he had been "made aware" that his departure would be helpful to Tsipras in continuing the talks.

"I shall wear the creditors' loathing with pride," Varoufakis wrote, adding that he would "fully support" the prime minister.

- 'This deal won't work' -

But that was before Tsipras' spectacular U-turn. Just days later, Tsipras agreed to a deal that would see Greece accept 86 billion euros ($96 billion) in exchange for sweeping reforms -- more austerity of the kind that voters had just rejected in a referendum.

Alexis Tsipras  leader of the radical leftist party Syriza  gives a speech at the party's centr...

Alexis Tsipras, leader of the radical leftist party Syriza, gives a speech at the party's central committee in Athens on August 29, 2015 Angelos Tzortzinis, AFP/File

Since then Varoufakis, never one to mince his words, has repeatedly blasted the deal in his frequent interviews with the international media.

"Ask anyone who knows anything about Greece's finances and they will tell you this deal is not going to work," he told BBC radio.

Tsipras has hit back, saying of Varoufakis: "Being a good economist doesn't make you a good politician."

And in a pointed tribute to Varoufakis' replacement -- who is as discreet and tight-lipped as his predecessor was confrontational -- he added: "Euclid Tsakalotos has done a marvellous job... If it wasn't for him, we wouldn't have achieved a deal."

Varoufakis has said he now wants to focus on building an anti-austerity network across Europe, a project that analysts say should not directly threaten Tsipras at the polls.

Greece will go to the polls again on September 20  2015

Greece will go to the polls again on September 20, 2015 Louisa Gouliamaki, AFP/File

Tsipras "still enjoys a degree of sympathy amongst Greeks. This election is up for grabs," said Gabriel Colletis, a France-based economist who has advised Syriza.

At least 25 Syriza lawmakers who opposed the bailout have quit to form a new party, Popular Unity. But Colletis said of Varoufakis: "He won't be joining forces with the rebels' new party."

- 'Narcissistic one-upmanship' -

For Michel Vakaloulis, a political scientist at the University of Paris, it was Varoufakis' failure to embrace compromise that made the split with Tsipras inevitable.

Varoufakis himself later revealed that he had failed to convince Tsipras to back proposals he had wanted to take to the ECB, marginalising him within the government.

His flashy personal style also jarred with Syriza, "a very austere party", Vakaloulis said.

Greece's former finance minister Yanis Varoufakis rides through Athens with his wife on July 6 ...

Greece's former finance minister Yanis Varoufakis rides through Athens with his wife on July 6, 2015 Andreas Solaro, AFP/File

A photo shoot with a glamorous French magazine was one moment that reflected his habit of "narcissistic one-upmanship". With a quarter of Greeks unemployed, the shots of him "on his terrace eating fish, against the backdrop of the Acropolis" served to further alienate him from Syriza, Vakaloulis said.

Both men had charm and chutzpah, but in other ways they were very different.

Varoufakis had zero experience as a politician until January, while Tsipras, who at 41 is 13 years his junior, was on the barricades as a student activist and has barely left politics since.

While Tsipras stayed in Greece, Varoufakis lived for years in Britain and Australia and delivers a stream of eloquent English every time a microphone is thrust under his nose.

But it was partly this difference in gifts that led Tsipras to hire him in the first place, Vakaloulis observed.

"Tsipras chose him precisely for his huge talents at communicating -- to show that Greece is not an isolated case in Europe, but that it's a story that could happen to any country."

Tsipras and Varoufakis: a messy split for Greece's double act