Can the EU support human rights and a free market at the same time?

This past May, the Greek government met with European Union (EU) leaders and the International Monetary Fund (IMF) to discuss terms for its ongoing bailout that provides funds to its beleaguered public sector. In exchange for another round of severe cuts to public spending, increased taxes and continued privatization (i.e. austerity), the Greek government is to receive loans which will enable it to continue paying its debts. The bailout funds will be dispersed by the European Commission (EC), the IMF and the European Central Bank (ECB), or the so-called Troika.

While some of the funds will be allocated to public sector services like healthcare and schools, most of it will be used to pay back existing loans and interest owed by Greece to the ECB and the IMF. So, in effect, Greece is borrowing money from the Troika in order to pay the Troika. Even the IMF, that paragon of neoliberal technocracy, has begun to express doubts about the sustainability of Greece’s debt. Nevertheless, the IMF remains on board with the latest bailout deal. How did Greece get into this mess?

The Greek economy joined the Eurozone in 2001 and the euro replaced the drachma the following year. At about the same time, German and French capital began to buy up Greek companies and government bonds which shored up government coffers and enabled the government to spend. Consequently, Greece’s annual budget deficits and public debt increased under both conservative and social democratic governments. But then came the crash and the whole Eurozone crisis.

As Greece headed into recession, tax revenues plummeted and the government’s annual deficit started to mount. No longer able to finance its spending and facing a burgeoning debt, Greece resorted to a bailout. Thus we come to the crux of the crisis. The bailout was not meant to help Greece maintain living standards and preserve public services during the recession. In order to ensure that German and French banks got their money back, government spending would have to be cut and taxes would have to be raised, Greek living standards be damned.

This past summer, the nominally ‘leftist’ Syriza government appeared to refuse to accept further austerity measures demanded by the Troika in the wake of a popular referendum. Syriza leader Tsipras called for the referendum in order to allow Greeks to say either “yes” or “no” to the terms of the Troika. A majority of the Greek people (61%) voted “no” to further austerity measures. Tspiras therefore had a mandate to reject the Troika’s demands.

Yet he and most of the other Syriza members in parliament backed down in the face of threats that Greece would be thrown out of the Eurozone and that the economy would plunge into even deeper into economic crisis. Athens ultimately decided to agree to the Troika’s terms in return for the promise of debt relief. Debt relief meaning that Greece would have to pay less back to its creditors and then be able scale back the austerity program.

It is nearly a year on and Greece remains mired in crisis. Unemployment stands at 24 percent generally and at 51 percent for youth. Average real wages continue to fall while pensions and public services continue to be to be cut. And at the same time Greece is taking the brunt of the influx of refugees from Syria and the Greater Middle East. The UN refugee agency estimates that there are just over 57,000 persons of concern in Greece.

The influx of refugees coupled with the ongoing economic crisis is the source of increasing social tensions within Greece. Last year, the neo-fascist party Golden Dawn, won 7% of the vote. Golden Dawn plays up fears that Greeks are being “overrun” by foreigners and face the possibility of becoming a minority within their own country, contributing to a rising tide of xenophobia and nationalism. Perhaps even more startling is that nearly a fifth of Golden Dawn voters were long term unemployed and that they did very well in the Aegean islands – which have seen their tourism industries collapse in the aftermath of the refugee crisis.

Traveling through some of those islands, one can see the results in the numerous foreclosed buildings dotting the town. Conversations with local business owners reveal a genuine sense of anxiety about the future. Ask a shopkeeper how their business is performing and they’ll tell you that business has gone off a cliff – a direct result of the previous summer’s influx of refugees. Apart from what appears to be elderly pensioners, there is hardly any youth in the empty cafes. It is not hard to imagine how that anxiety morphs into the kind of resentment that benefits parties like Golden Dawn.

In fact, many young Greeks are choosing not to stay in Greece at all. More than 200,000 Greeks have left the country since the financial crisis began. With such persistently high rates of unemployment, many young Greeks feel that they have no choice as there is no future for them in Greece. And just like the electoral success of Golden Dawn, the exodus of so many young Greeks highlights the public’s complete lack of confidence in Greek institutions.

The weakness of Greek institutions is having a negative impact upon the refugees applying for asylum there. According to Human Rights Watch, Greece’s Asylum Service is understaffed and underfunded, resulting in frustratingly long wait times for applicants. In addition, the report found that asylum seekers have had their freedom of movement curtailed and in many cases lack access to basic services like healthcare and legal aid.

As terrible as the plight of the refugees in Greece is, it is not necessarily surprising. After all, the Greek state’s capacity has been severely diminished as a result of years of austerity. It can hardly provide adequate services to its own people let alone the refugees. Here, there is a contradiction between the EU’s professed support for human rights norms and the free market.

Written by: Nickolas Speer