How did Greece get into this state? Greece was badly prepared for the financial crisis after a decade of overspending. In many ways, the weakness of its economy and public finances was akin to that of Spain, Ireland and Portugal, which also found themselves brutally exposed after 10 years of living beyond their means. Greece, though, dors a special case, which hpw why in it became the first EU country to send ggovernment distress signal. Since how does greece government make money, Athens has struggled to piece together a deal with gredce lenders that allows the economy to recover. Brussels switched its support to new joiners in the east and the Baltic nations that had entered the EU and wanted to join preparations for the euro. Nevertheless, Athens kept on spending, helped by its decision to join the euro in The new currency kept borrowing costs down and made it easy to secure funds from commercial banks at rock-bottom interest rates, increasing its dependence on cheap loans to fill the spending gap. In the 10 years before the financial crash, public sector wages doubled and departmental spending soared.
Thousands of refugees left in cold, as UN and EU accused of mismanagement
Greece has agreed a deal to try and tackle the huge money problems in the country. It owes billions of pounds to banks and other countries in Europe but some of these countries have agreed to help Greece out. In exchange the Greek government will have to do lots of things to try and reduce what they owe, like increasing the amount of money they take off Greek people in tax and reducing how much older people get for their pension. It’s the third time the European Union has given Greece what’s known as a bailout. The deal came after long talks through the night and after weeks of uncertainty. Here’s a recap of what’s been happening. In a big vote on Sunday 5 July, the Greek people decided to say no to a deal with countries who they owe money to. Over the last 10 years, Greece borrowed lots of money from European banks and from other countries’ governments. It used the money to run the country, pay for the Olympic Games and also for things like big pay rises for people who are paid by the government. But they’ve found it hard to pay it back because when you borrow money, you have to pay what’s called ‘interest’: meaning you pay back more money than you borrowed to begin with. Many Greeks felt it was unfair to keep paying back the money in the way that they have been doing, because it makes life very hard for ordinary people. But how have things got this bad? Banks in Greece have been closed for more than a week and people who live there limited to getting no more than 60 Euro from cash machines. That happened after the European Central Bank, which has been giving Greece money, decided not to give them any more. They did this because Greece couldn’t reach an agreement with them. Greece then decided to shut the banks and restrict the amount of cash machines that work, because they don’t have the money they need. There are big queues as worried people in Greece attempt to take out their money. Their total debt is billion Euros, which they owe to various countries and banks within Europe.
Ways Greece has saved money
In Greece defaulted on its debt. While some may think that Greece would have been better off never having joined the Eurozone , the fact of the matter is that the Greek economy was suffering structural problems prior to adopting the single currency. During the s the Greek government pursued expansionary fiscal and monetary policies. But, rather than strengthening the economy, the country suffered soaring inflation rates, high fiscal and trade deficits , low growth rates , and several exchange rate crises. The belief was that the monetary union backed by the European Central Bank ECB would dampen inflation, helping to lower nominal interest rates , thereby encouraging private investment and spurring economic growth. Further, the single currency would eliminate many transaction costs , leaving more money for the deficit and debt reduction. However, acceptance into the Eurozone was conditional, and of all the European Union EU member countries, Greece needed the most structural adjustment to comply with the Maastricht Treaty guidelines. For the rest of the s, Greece attempted to get its fiscal house in order to meet these criteria. While Greece was accepted to the EMU in , it did so under false pretenses, as its deficit and debt were nowhere near being within the Maastricht limits. In , the Greek government openly admitted that its budget figures had been doctored in order to join the Eurozone. For most of the s, the interest rates that Greece faced were similar to those faced by Germany. In , Greece was below the EU average of Much of this lack of revenue is the result of systematic tax evasion. The prevalence of this behavior reveals that, rather than being a behind the scenes problem, it is actually more of a social norm , one that wasn’t remedied in time. The adoption of the euro only served to highlight this competitiveness gap as it made German goods and services relatively cheaper than those in Greece. While the German economy benefits from increased exports to Greece, banks, including German ones, benefit from Greek borrowing to finance the importation of these cheap German goods and services. Compared to Germany, Greece had a much lower rate of productivity , making Greek goods and services far less competitive. In , U. Bailouts from the IMF and other European creditors were conditional on Greek budget reforms, namely cuts to spending and increasing tax revenues. Such severe austerity measures amidst the worst financial crisis since the Great Depression proved to be one of the largest factors attributing their economic implosion.
What is the future of Europe?
Thu 9 Mar gdeece W idad Madrati remembers governmeht first snowfall at Oreokastro in the way most children would, as a thing of wonder. The year-old Syrian did not mind that the water pipe to the outdoor sinks had frozen. She took photographs of the icicles. The pictures on her phone show nothing of the broken chemical toilets or the discarded, inedible food; nor of the flimsy tents pitched on freezing ground by refugees, such as her family, who arrived too late to find a spot inside the concrete shell of the old warehouse.
Instead, the images show children playing in the snow. Stranded outside the Oreokastro buildings, in a tent dusted with white flakes, the other members of the Madrati family were more realistic about survival and begged the hod and volunteers for a way out of the camp. The family was among the momey to leave their previous temporary home at Idomeniclose to the border with Macedonia, on the overland western Balkan route to northern Europe.
It did not. The settlement was evacuated and its residents moved to former industrial sites such as Oreokastro and disused army greeece. She tells her story in the English she learned from volunteers at Idomeni and then taught to other refugee children at Oreokastro. Her family, who qualify by almost any criteria as refugees, have witnessed much of what has gone wrong in Greece since the country became the gateway to Europe for record numbers of refugees and migrants.
Their ordeal stands in stark contrast mooney the international funding and energy expended to help people like. A sequence of events beginning with the record number of people who flowed into Greece in June and culminating in the photograph of drowned Syrian toddler Alan Kurdi woke the world to the refugee miney. The effect of that awakening was to tip the entire humanitarian complex toward Greece, sending resources tumbling out of the developing world into the European Union.
It prompted an unprecedented number of international volunteers to descend on the country, the UN refugee agency to declare an emergency inside the European Union, and the EU to deploy its own humanitarian response unit inside Europe for the first time.
In the process, it became the govednment expensive humanitarian response in history, according to several aid experts, when measured by the cost per beneficiary. Exactly how much money has been spent in Greece by the European Union is much reported but little understood. However, since it yow not complete the extensive strategic planning required, the Greek government did hlw receive significant amounts of these funds, necessitating emergency assistance from the commission, channelled through other means.
On the basis that the money was spent on responding to the needs of all 1. The haunting image of Alan Kurdi, lying drowned on a Turkish beach on 2 Septemberwas shared more than 20 million times on social media.
It prompted an immediate spike in Google searches related to Syria and an avalanche of private donations to charities working on behalf of refugees. The Swedish Red Cross saw its daily donations leap fold in the week after the image circulated, according to a study led by Paul Slovic at the University of Oregon. At the International Rescue Committee IRCa New York-based relief governmrnt, response to gvoernment photograph crashed its website and drove a surge of public donations.
It also made it imperative for international non-governmental organisations INGOs to show they were responding to events in the eastern Mediterranean. For the established groups already working in Greece, the sudden influx of funds was both welcome and destabilising.
Metadrasi, a Greek organisation known for training interpreters and caring for unaccompanied minors, had experienced staff poached by bigger new arrivals on the scene that could afford far higher salaries. This led to some wasting the chance to spend constructively. Among the cautionary tales to emerge from this period was the Apanemo transit centre on Lesbos.
A million-dollar facility built by the IRC on the steep hillside close to the main landing beaches during the busiest months init was designed to receive 2, refugee arrivals per day. Governmeent never ran at anything approaching capacity — partly because the refugees started landing on a different part of the island — and was mothballed in March The IRC says it has been able to dismantle materials and use them at other facilities, but uow site now stands empty, while chaotic conditions elsewhere on the same island have resulted in fatalities among refugees.
But the rapid deployment of resources with goverbment results was in no way confined to the IRC. An office with a foes staff who had previously spent much of their time overseeing contract workers assisting the Greek asylum service expanded rapidly. Roughly one-third of the workforce were international staff. Fotini Rantsiou, a Greek UN staff member who took a sabbatical from the organisation to volunteer, says tensions between local and international staff complicated relations within the agency.
The decision to take a role in the Freece crisis also put the UNHCR on a collision course with one of the core elements of its mandate: to advocate for the rights of refugees. The international organisations would work with a Greek administration that, at least in terms of its public statements, was among the most refugee-friendly in Europe.
However, problems arose because many officials freece the ruling Syriza party were inclined to see the well-financed foreign organisations more as colonialists than as humanitarians. The resentment was fuelled by the fact that much of the funding on offer was directed via international aid agencies, not the Greek government. This was grece damaging, according to diplomats, Greek officials and aid workers, since the government had the role of coordinator and had final sign-off on projects.
Mass migration is not something new to Greece. An influx of migrants from the Balkans and farther east arrived from the s onwards and were largely left to fend for themselves. The most the issue merited grece its own section at the Greek Ministry of the Interior. But in the last couple of years Greek migration officials have had access to one of the largest money pots administered by the European Commission, the aforementioned AMIF ddoes ISF funds.
These funds are relatively complicated to access. They are goverbment in seven-year programmes, commencing in moneg, and required Greece to set up a managing authority and develop a strategic plan. When Syriza took office it found little of this groundwork had been done by the previous conservative administration. The government, preoccupied with resolving its debt crisisshowed equally little interest in taking the first steps to access these funds.
European Commission officials complained they could find no one to talk to in Athens, despite having half a billion euros potentially on offer. It took the historic wave of refugees and migrant arrivals that crashed over the Greek islands in June doess force a rethink. Some early steps were taken to establish a managing authority and submit a plan. But after a cabinet reshuffle and fresh elections these efforts were put on hold.
The reshuffle brought Ioannis Mouzalas into the role of junior minister. An obstetrician with hwo service at the medical charity Doctors of the World, he appeared a strong choice for the role. But those hoping for a step change would be disappointed. A ministry official involved in setting up the managing authority to access European funds told the new boss that the technical preparation was important. As the autumn of approached, Greece remained a refugee corridor, with the majority of new arrivals spending less than a week after arriving on the islands before their exit over the northern border along the western Balkans route.
As hundreds of thousands of refugees and migrants passed through Greece, it became obvious the country had no mechanism to compel new arrivals to apply for asylum. Greece came under considerable pressure from the EU to set up reception centres on the eastern Aegean islands of Lesbos, Kos, Leros, Chios and Samos, in order to identify and fingerprint all new arrivals.
In October, the Greek prime minister, Alexis Tsipras, promised the German chancellor, Angela Merkel, that the reception centres would be operational within a month. It was already clear to the gathered leaders that any future plans to stem migrant flows into Europe would be contingent on Greece being able to process new arrivals, identify those in need of protection, and deport those deemed not to qualify. It was also clear to everyone that Greece was nowhere close to being able to do these things.
By the end of the meeting, Greece had been offered emergency funds to accommodate a total of 50, refugees, with the UNHCR tasked with finding places for 20, of these in hotels how does greece government make money gogernment, and the remainder to be housed in camps under Greek authority.
By mid-November it was already clear that diplomatic agreements were not changing the situation on the ground. After the autumn ofa Friday ritual was established. In Athens, representatives of the Greek army, police and several ministries doees meet with a team from the European Commission and the UN to update them on progress.
Good luck. Panos Kammenos has been fovernment of the indisputable political winners from the upheaval in Greek politics. Kammenos, a rightwinger, had been persuaded to support the leftwing government, and was rewarded nake the defence ministry. With responsibility for dealing with refugees now divided between several Greek ministries and the UN, EC cash flowed and effective oversight of spending was removed. A series of amendments that passed through the Greek parliament stripped out auditing requirements on contracts related maake the refugee crisis.
On 9 Marchthe migrant trail was halted when the border with the former Yugoslav Republic of Macedonia was closed. Nine days later it emerged that a deal had been agreed between the EU and Turkey, under which Greece would return newly arrived refugees and migrants, and Turkey monney stem the flow of people to Europe in return for aid money and political concessions. While this was publicly received as a shock, the government in Athens had known for months what was coming.
It is a popular lament in Greece that the country has good laws but terrible governance. It took governmemt ad hoc jumble of different services across different ministries and created a governmrnt ministry of migration.
Odysseas Voudouris was appointed by the prime minister to head a new general secretariat, under Mouzalas, grfece would do gocernment of the groundwork, from running documentation centres to appointing camp directors. When Mouzalas asked the new official to hold back before governmment any initiatives, Voudouris initially agreed.
When, six weeks later, he was still watching from dors sidelines, he wrote to Mouzalas to tell him the situation could not continue. The pair stopped speaking to each other, according to ministry officials, and started communicating by letter. Voudouris claimed that instead of a professional bureaucracy with transparent roles, Mouzalas operated an inefficient system staffed by people who lacked relevant experience.
Mouzalas declined to comment for this article. In an exchange of letters, the move was blocked by Mouzalas even after a senior UN official intervened to explain that the hires would be paid for by funds that would be lost if left untapped. Nikos Xydakis, who worked closely with Mouzalas throughout this period as a junior foreign minister, became increasingly concerned with how the crisis was being handled. The problems could have been addressed and we could have had a much better govetnment … Greece can innovate solutions.
Now there is no time left for managerial negligence and short-termism. Speaking to state television in NovemberMouzalas deflected responsibility from his ministry. It is controlled by the relevant European authorities; this is the law. When Imam Ali arrived at Softex, a ruined toilet paper factory downwind of an oil refinery and outside Thessaloniki in April, he slept rough outside mohey derelict main building. Nine months later, and still gteece news on whether he could makee reunited with his wife in the Netherlands, the year-old Palestinian, who had lived in Syria, was finally moved to a weatherproof container.
The retired engineer picked up the honorary title of imam after leading goernment in a tent that residents use as a mosque. He also led a number of protests over conditions at the camp.
The police? The army? The UN? Who do we talk to? Forced to warehouse people who were determined to leave, the Greek government pursued an unlikely strategy. Owing to heavy metal contamination of the water, exposed asbestos panelling and the presence of mosquitoes grecee can transmit malaria, the Greek Centre for Disease Control and Prevention recommended their closure in July.
The death of Alan Kurdi: one year on, compassion towards refugees fades
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