After the agreement reached in August 2015 between Greece and its creditors, the news coverage about the economic situation in Greece has become far more discreet since Prime Minister Alexis Tsipras’ government has decided to not leave the euro area – the “Grexit”. Could it mean that Greece has recovered a bit and that the diverse threats to its stability – huge influx of immigrants, tough austerity measures, systemic risks – have weakened?
About immigration, the agreement between the European Union (EU) and Turkey could be part of the solution with the sending back of immigrants from Greece to Turkey. At a cost of EUR 6 billion in aid from the EU, it’s too early to assess the quality of Turkey’s commitment. The number of immigrants reaching Europe through Greece remains difficult to evaluate, but local sources said there are presently as many new immigrants as before the EU-Turkey agreement.
About the economic situation, Tsipras was joined by his Portuguese counterpart Antonio Costa to ask for the end of austerity measures which they considered as counterproductive. Given that the Greek economy is outperforming, Tispras said, it’s time to start debt relief talks. According to the IMF, Greece’s economic growth is projected to grow from -0.6% in 2016 to 2.7% in 2017, a gain of 3.3 percentage points in just one year. Yet Creditors took an opposite stance to Tsipras and seemed rather willing to push for more austerity during the latest talks in DC.
In short, Greece may well look like this group of survivors living in a small community named Alexandria, surrounded by thousands of relatively hostile “walking dead”, unless Tsipras manages to take advantage of the distance between the IMF and the European partners to attract the “walking dead” elsewhere. In the end, that’s what the global economy may look like too, but you’re not in Alexandria yet to see it.