Tate 1

Campbell Tate
AP Language and Composition, Period IV
12 December 2016
Resources and Refugees: How the Refugee Crisis is Affecting the Greek Economy
In 2011, the Syrian Civil War broke out when Syrian president Bashar Al-Assads
government violently repressed protesters advocating for his removal. The result was a
massive, bloody civil war between several factions, including ISIS, many of whom have
received backing from foreign superpowers. The situation escalated in late 2015 with
the introduction of airstrikes, displacing millions of people. Most of these people fled
Syria, flooding countries like Jordan, Hungary, and many European countries with
refugees. One of these European countries hit hard with refugees is Greece, because of
its proximity to Turkey and to a lesser extent Syria itself, via oversea travel. Many
migrants die making this perilous journey, but the ones that make it to Europe have
caused controversy. After the Paris attacks in November 2015, in which fears that
terrorists were infiltrating Europe disguised as refugees were realized, European
countries took steps to confine refugee occupation to Greece, which has experienced
crippling debt due mostly to tax evasion, requiring three bailouts from the EU.
Considering the debates over the pros and cons of refugees, combined with the
unreliable nature of Greeces economy, this begs the question: What is the effect of the
refugee crisis on the Greek economy? The answer is as complicated as the question
suggests. The refugees are costing Greece money, and while Greeces economy is
definitely growing, the effect of the refugees on its recovery has been damaging.

Tate 2

Refugees cost money. Even with the aid theyve received, refugees face
problems that will require money to fix. Many of the problems the refugees face include
poor housing conditions, low supplies of food and water, bad hygiene facilities,
education and employment services, and psychiatric help (Greece). These supplies
and services will require significant investment to remedy their shortages. The effect of
refugees on a neighboring country, Jordan, are already becoming clear. As Todays
Zaman reports, Syrian refugees fleeing the war have started to take a significant toll on
Jordans weak economy, straining government services in every area from social
services to health, from education to security ("Jordan uneasy as Syrian refugees
pressure economy"). This description of the effect of refugees on an economy in a
similar condition to Greeces is troubling, and illustrates the wide range of their impacts.
The cost of refugees, however, can be better expressed in terms of money. According
to [Foreign Minister Nasser Judeh], about $600 million was spent by the [Jordanian]
government on taking care of refugees as of last year, with only one-third from
international donors (Jordan uneasy...). This is a truly massive amount of money,
which would have been too much for a weaker economy. States News Service, reported
that as of 2015, the Hellenic Republic has spent about one billion euros coping with the
influx of refugees ("GREECE STRUGGLES TO RIGHT ECONOMY AS REFUGEE
INFLUX ADDS TO WOES"). One billion euros is $1,066,900,000, almost 180% of what
Jordan paid. For an economy in Greeces condition, this is a serious monetary amount.
Even wealthy countries are hesitant to contribute to the refugee crisis, and Greece is by
no means a wealthy country.

Tate 3

Greeces debt is so significant that they are incapable of handling the crisis
alone. Leaders from Greece and from foreign countries have acknowledged this. The
Guardian wrote that the Greek Prime Minister Alexis Tsipras said in a statement that
Greece, like other frontline states, has raised the issue of the spiraling costs of dealing
with the refugees and has pushed for additional financial assistance ("Germany may
offer Greece financial aid to tackle refugee crisis; Berlin acknowledges Greek economy
too weak to cope with influx and is willing to give support in return for more robust
border controls"). As an honest request for help, this statement makes it clear that
Greece understands as well as anybody that they are unprepared to handle the crisis.
Germany has also expressed this concern. According to Kate Connolly and Helen
Smith, the [German] government admitted Greeces economy was too delicate for it to
be able to deal with the crisis on its own (Germany may offer). Germany recognizes
Greeces economic weakness, which is partially why theyre implementing plans to
contribute financially. In November of 2016, EU News discussed the implications of a
slight improvement in the Greek economy while Germanys faltered. Germany has low
debt, so they can suffer even a severe recession without facing a debt crisis. Greece,
on the other hand, will require further bailouts from the EU if it experiences even a mild
downturn ("Greece economy rallies while Germany stutters but restraint still required").
A country with an economy in this position has enough problems to deal with without
adding refugee relief to the mix. Now, national debt is one thing, but the condition of a
nations citizens is a different way to gauge the state of economies. The Economist
Intelligence Unit reported that A Eurostat study published on October 17th, 2016

Tate 4

showed that more than one-third of Greeks (35.7%) were at risk of poverty or social
exclusion in 2015, putting Greece in the bottom 3 in the EU, just above Romania
(37.3%) and Bulgaria (41.3%) ("Greece economy: Government adopts 2017 draft
budget"). It would seem that the individual conditions of its citizens is as poor as its
national economy.
Greeces economy, although it experienced a severe downturn and is by no
means a powerful one, is on the upswing. Plans for 2017 are wide-ranging in scope. As
reported by the Economist Intelligence Unit, Greece plans to cut spending, increase
existing taxes, and introduce new taxes in a draft budget that has yet to be verified.
However, despite these reforms, the government might struggle to increase revenue
because of tax evasion and overtaxed companies going out of business (Greece
Economy: Government). Tax evasion is a big deal for the Greek economy, because
it contributed to the current crisis. Fortunately, the need to address this problem has
been recognized. According to PR Newswire, in his major policy speech in September
2016, Mr. Tsipras said he would continue to focus on corruption and tax evasion and
said he plans to introduce a measure in Parliament to allow tax scofflaws to pay taxes
on undeclared income without criminal penalties ("Greek Economy Recovering,
Growing, Prime Minister says in Major Policy Speech"). The Prime Ministers willingness
to provide second chances for tax evaders demonstrates the dire need for tax revenue,
but his efforts for reform are promising. He also urged policymakers to develop
Greeces competitive advantages, which include a highly educated workforce. He said
the economic tide is turning for the better, and described the excellent performance of

Tate 5

Greeces fiscal balance in relation to its agreement commitment in 2015 (Greek

Economy Recovering). Tsipras attempts to establish confidence in the Greek
economy show that hes planning for a big turnaround. His optimistic view of the
economy is accurate; The Economic Sentiment Indicator, which is one way of
measuring the Greek economy, has been rising. The unemployment rate is falling;
during the first seven months of 2016, an estimated 254,000 jobs were created (Greek
Economy Recovering). It seems the economy is recovering somewhat. India Banking
News published that Nikolaos Karamouzis, the chairman of the Board of Directors, says
the Greek economy shows a number of positive signs, including the stabilization of the
economic environment, the expected return of positive growth rates and a smooth
deliberation with international creditors ("Third Quarter 2016 Financial Results - Nov.
16."). This is more good news for the Greek economy. According to States News
Service, even though the bailouts caused some negative effects, Athens is making
progress stimulating growth as of 2015, but they would have to implement some
controversial reforms in 2016 that might cause the government to lose its majority in the
Greek Parliament (GREECE STRUGGLES). So reform and recovery will be difficult,
but not unfeasible for the Greek economy. Some of these controversial reforms are
already taking place; Athens is privatizing air- and seaports, purchasing half of the
Independence Power Transmission Operator, developing a secondary market for
non-performing loans. These reforms send a strong message that the Greek economy
is aiming for growth (GREECE STRUGGLES). These measures indicate good
things for Greeces future. Other good things for Greeces economy include that there

Tate 6

was a sharp rise in tourism, its main industry, in July after the first-quarter rates were
low ("Greece economy: Last-minute bookings provide boost for tourism."). The low
first-quarter rates were worrying, but since things have picked back up people have
been able to relax for a second. The Greek economy is recovering slowly, with reform
measures, boosted tourism, and crackdowns on tax evasion. However, the effects of
the refugees specifically are another matter.
The refugees are slowing the Greek economys recovery. The aforementioned
costs are consuming much-needed money, but the refugees are having a less direct
effect on Greeces economy as well. When the first-half tourism bookings were low,
sector representatives feared the migrant crisis, among other things, as a potential
cause. Last-minute bookings reversed that trend in the second half, but the
representatives fears were not unfounded, because tourism arrivals are down in
refugee hotspots. In an article by the Economist Intelligence Unit, In the first seven
months, arrivals were down year-on-year by 15.9% in Kos, 29.7% in Samos, and 62.7%
in Lesbos. This is despite refugee levels being massively below 2015 levels (Greece
Economy: Last-minute). So aside from the direct economic effects of the refugees,
theyre also impacting Greeces primary industry.
Solutions to the crises are unclear, as Greece struggles to weather the
dual-pronged assault of chronic debt and the flood of refugees. Part of the solution
should involve integrating the refugees into Greek society. The Cihan News Agency,
which describes a number of benefits of refugees to an economy once they are allowed
to become part of the community, wrote that Naturally, when migrants are unable to

Tate 7

integrate into a host country they cannot contribute to its economy, either, though
positive outcomes are common enough to be optimistic ("Syrian refugees and the
economy."). The refugees are currently being housed/imprisoned in primitive camps as
they struggle to find work, and are not allowed to leave the country for fear that they will
pervade and cause problems with Europe. If they were integrated more fully into Greek
society and allowed to become part of the workforce, they would create businesses and
provide labor. Once they had money, they could become consumers that would put
money back into the economy. Additionally, the housing, stores, and infrastructure
needed to increase the population so significantly would create all sorts of jobs for the
refugees and for Greek citizens. Greece would also benefit from business investment.
According to India Banking News, Nikolaos Karamouzis said that investment and an
increase in asset prices would contribute to addressing the macroeconomic challenges,
as unemployment, social inequality, debt sustainability and, critically, debt
management (Third Quarter 2016). If businesses invest and refugees are
encouraged to contribute to the Greek economy, then the damaging effects of both
crises would be mitigated.
I had more fun working on this paper than I expected to. After choosing my
research topic, I began considering the possibility that I would regret it, but I decided
against changing it because I wanted to see where the project would take me. Neither
Greece, nor economics, nor refugees were subjects I knew very much about. I was
vaguely familiar with some aspects of each of them, but this was very much a learning
process for me. I expected to have difficulties finding information on a topic so specific,

Tate 8

but my problem instead was that I had too much, and much of it contradicted other
information. Having to make sense of contradictory information or just raw data and
interpret meaning from it was difficult, and the timespan over which it occurred also
complicated things. Additionally, I got lots of information about the state of the Greek
economy and plenty about refugees, but few things linking the two, so I was forced to
make some inferences and interpret the data. However, I feel confident about the
results and I am happy with my learning process.

Tate 9

Works Cited
"Germany may offer Greece financial aid to tackle refugee crisis; Berlin acknowledges
Greek economy too weak to cope with influx and is willing to give support in
return for more robust border controls." theguardian.com, 16 Oct. 2015. General
OneFile. Accessed 30 Nov. 2016.
"Greece." International Rescue Committee (IRC). International Rescue Committee
(IRC), n.d. Web. 01 Dec. 2016.
"Greece economy: Government adopts 2017 draft budget." Economist Intelligence
Unit: Country ViewsWire, 19 Oct. 2016. Global Issues in Context. Accessed
29 Nov. 2016.
"Greece economy: Last-minute bookings provide boost for tourism." Economist
Intelligence Unit: Country ViewsWire, 12 Aug. 2016. Global Issues in Context.
Accessed 29 Nov. 2016.
"Greece economy rallies while Germany stutters but restraint still required."
European Union News, 26 Nov. 2016. General OneFile. Accessed 29 Nov.
2016.
"GREECE STRUGGLES TO RIGHT ECONOMY AS REFUGEE INFLUX ADDS TO
WOES." States News Service, 31 Dec. 2015. General OneFile. Accessed 1 Dec.
2016.
"Greek Economy Recovering, Growing, Prime Minister says in Major Policy Speech."
PR Newswire, 12 Sept. 2016. General OneFile. Accessed 30 Nov. 2016.

Tate 10

"Jordan uneasy as Syrian refugees pressure economy." Today's Zaman [Istanbul,

Turkey], 3 Mar. 2013. Global Issues in Context. Accessed 1 Dec. 2016.
"Syrian refugees and the economy." Cihan News Agency, 9 Dec. 2015. Global Issues in
Context. Accessed 1 Dec. 2016.
"Third Quarter 2016 Financial Results - Nov. 16." India Banking News, 16 Nov. 2016.
Infotrac Newsstand. Accessed 30 Nov. 2016.