Tuesday, 24 October 2017

Government failures create a Greek class of working poor

The latest reports on Greek workers’ income make dismal reading.

More than one in three Greeks is at risk of poverty and social exclusion - the highest rate in the Eurozone and second-highest rate in the EU after Romania and Bulgaria (40pc) - the latest Eurostat figures reveal.

This is partly because of unemployment, which remains stubbornly high after an eight-year recession. By the official figures it stands at 23 percent, but a Labour Institute report, which also takes underemployment into account, puts it at 28 percent (compared to the Eurozone’s 9 percent).

The Labour Institute also highlights the second reason for Greek poverty risk: the fact that people are simply being poorly paid. Due to the weakness of the Greek recovery, new jobs are almost entirely part time, and underpaid. A third of full-time workers and one in four part-time workers are being paid an average of €397 euros, even less than minimum wage €431 per month) which is roughly the statistical poverty level (and this is already defined as a very low €4,500 per annum in Greece, compared to, say, €12,765 in Germany).

The Institute, Greece's main labour think-tank, blames low rates of investment. Given current rates, it says, Greek employment would reach pre-recession levels in 2033.

These readings underline how the medicine of austerity is still failing to produce notable results in Greece, long after Spain and Portugal graduated from their programmes and are now achieving higher rates of growth than the Eurozone average, while Ireland is approaching zero rates of unemployment.

It is true that thanks to austerity, Greece balanced its budget in 2014, but the recession produced by public spending cuts only ended this year, and the recovery is in the order of 0.8pc of GDP in the second quarter, failing to meet predictions of 2.7pc growth. 

Why is this? Partly because the Greek recession was deeper than those of other programme countries, wiping a quarter of the economy out; and partly because the Greek debt is known to be unsustainable, frightening investors away, and the Eurozone has been slow to reschedule it. But the answer also lies in the reluctance of Greek governments to challenge vested interests (with the exception of the Piraeus Port Authority, all of Greece’s major privatisations went to oligarchs), build an effective tax enforcement mechanism (the government’s conservative estimate of tax evasion from fuel smuggling, for instance, is €1bn), or to stimulate investment, exports and job creation.

This last is the most complex problem. It is partly due to the fact that banks cannot finance enterprise, because they have enormous levels of non-performing loans after years of dithering on governments’ part on how to dispose of these. Then there is the reluctance of governments to simplify procedures for opening and closing businesses, licensing and permitting, because that would involve staff cuts in the state – the country’s most influential client base. Third, there is the impossibility of offering tax cuts to businesses and consumers, because the combination of a bloated state and inefficient tax collection machinery mean high taxes for all. And finally there is the inability of most Greek politicians to comprehend how money is made, because few of them have worked in the private sector.  

Sunday, 24 September 2017

Nurzai’s Odyssey

This article was published in the Spring 2017 issue of The Sewanee Review


When Nurzai was eight years old, a shootout at the Afghan-Iranian border separated him from his family. It was late at night, and the family was trying to cross into Iran. Instead of being met by border guards, they found themselves negotiating with smugglers.

“They told us to get out of the car and walk… We had been warned by the smuggler’s own henchmen that he is a thief and might kidnap children, even if we paid him… we thought that if we ran for it we might escape,” says Nurzai, who was travelling with his parents, an older brother and an older sister. “They opened fire spraying bullets everywhere… Everyone else ended up in one group and I was on my own.”

Nurzai, who prefers not to reveal his real name and hometown, is now a demure, soft-spoken 14 year-old. He has spent the last six years making his way, alone, to Greece – the first European foothold attainable from Asia. The fuzz on his upper lip suggests a sophomore, but the experiences he has been through, his composure as he relates them, and his very survival, suggest resourcefulness and maturity rarely found in adults, let alone children.

Friday, 22 September 2017

Greek asylum chief calls for a massive legal migration into Europe

This article was published by Al Jazeera International.

Greece's asylum chief is calling on Europe to resettle “several hundred thousand” refugees a year directly from the Middle East, rather than allowing them to suffer the hazards of illegal crossings.

“That’s the number of people coming into Europe anyway,” says Maria Stavropoulou, who has overseen Greece’s Asylum Service since it was founded in 2013. “This past year [Europe] has had a million asylum applications. We know who makes these applications. The majority is people coming irregularly into Europe. So what are we doing? We’re just giving business to smugglers.”

The European Union runs a Resettlement programme, through which refuges can be admitted directly from Turkey, Lebanon and Jordan, but it has a ceiling of 22,504 over two years.

Thursday, 14 September 2017

Gold miner’s woes cloud Greece’s investment skies

 This article was published by Al Jazeera International

The extended plant at Olympias, which received a permit on Friday 15 Septemebr

ATHENS, Greece – The fate of one of Greece’s biggest foreign investments hung in the balance on Wednesday, as relations between the government and Canada’s Eldorado Gold Corporation seemed close to breaking point.

Push, literally, came to shove outside the energy and environment ministry, as dozens of yellow-vested miners tried to force their way past a blue wall of riot police to gain an audience with minister Yiorgos Stathakis.

“The miners are going crazy. They don’t know what’s going to happen tomorrow,” said Yiorgos Hatzis, a senior member of one of the four unions that chartered overnight buses from northern Greece to picket the ministry.

Saturday, 29 July 2017

Greece’s Pivot toward China

This article was published by The Weekly Standard under the title, "How China acquired a major port in Europe". 

COSCO's first of two 80,000-tonne capacity floating docks, new additions to the Piraeus Port Authority's ship repair division. (Handout photo)

ATHENS, Greece - In the Salamis strait where an Athenian-led fleet of 380 ships once sank a Persian fleet of more than a thousand and altered the history of the Western world, the China Ocean Shipping Company (COSCO) is redrawing global trade routes. The strait lies just outside the port of Piraeus and is the heart of its cargo business. Container ships arrive around the clock to be loaded or unloaded with pinpoint precision. The only sound is that of whirring motors as containers are lifted from decks and placed on flatbed trucks to be stacked on the quay.

Since 2008, when it signed a 35-year lease from the Piraeus Port Authority to operate two container piers, COSCO has increased throughput from 700,000 twenty foot-equivalent units (teu) to what it estimates will be over four million this year. Within the next five years, Piraeus is scheduled to handle 7.2mn teu a year, making it the Mediterranean’s biggest cargo hub and putting it behind only Rotterdam, Antwerp and Hamburg in Europe. COSCO has sunk €600mn into shoring up the strength of the piers to shoulder the weight of container cities stacked six storeys high, doubling the size of the second pier, and installing 33 of the tallest gantry cranes in the world, capable of loading and unloading container ships so large, they have not yet been built. By the time COSCO finishes its investments, Piraeus will be the only Mediterranean port capable of harbouring five giga-container vessels simultaneously.

Friday, 16 June 2017

Eurogroup grants the beginnings of long-term debt relief for Greece

This article was published by Al Jazeera International. 

Greece came away from Thursday’s Eurogroup meeting with a $9.5bn (€8.5bn) loan instalment and the beginnings of a commitment to longer-term debt relief – the Syriza government’s key demand since it came to power in 2015.

The six hour-long meeting of Eurozone finance ministers effectively brought the International Monetary Fund on board with Greece’s third bailout loan, currently held only by European institutions, because the IMF insisted on debt relief as a precondition.

“Nobody claims that this is the best solution,” said IMF chief Christine Lagarde, who attended the Eurogroup session. “That would have been a final approval on debt relief so that there would be clarity. This is second best.”

Tuesday, 6 June 2017

Banks to liquidate €11.5bn of property

Attention is focused on whether Greece will receive a rescheduling of its public debt at the June 15 Eurogroup. Less attention is lavished on private Greek debt. 

The Bank of Greece on Tuesday published its targets for the reduction of non-performing exposures (loans that haven’t been serviced for at least 90 days), which have reached a staggering €105.2bn, or 60 percent of GDP.[1]