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Friday, March 4, 2016

Refugee Subsidies Must Be Controlled!

As Greece can look forward to (well-deserved!) financial support from the EU to handle the refugee crisis, an entirely new perspective opens up: whenever money flows in large amounts to provide help, the question is whether all that money ends up in the places where it is supposed to end up. It is no secret that a good portion of EU subsidies for Greece, particularly agricultural subsidies, ended up in the wrong pockets for the wrong purposes. The Greek government is now challenged to do everything possible to assure proper usage of the refugee subsidies.

If Sweden serves as an example, there are probably already many entrepreneurial Greeks who ponder how to get a portion of the cake. The immediate financial help is said to be 300 MEUR. Those 300 MEUR which the EU will transfer will transform into income on somebody's part. One would think that it cannot be too difficult to trace and control the money which will be disbursed for proper application.

If Sweden serves as an example, one ought to be worried. As this article suggests, an entire private refugee support industry has developed in Sweden. In 2015, 150 MEUR were disbursed to private operators of refugee housing centers. The housing centers are of greatly varying quality. The major operators allegedly have a profit margin of 50% and more!

But it's not only housing where intermediaries will be able to make money. In fact, money is to be made wherever the above 300 MEUR flow. Assuming a multiplier effect of 7, that original 300 MEUR will eventually add up to over 2 BEUR in cash flow. If properly used, that cash flow will be in exchange for products and services delivered to refugees. The key question is how much of that cash flow will end up as profits on the part of intermediaries, in exchange for no value received. 

5 comments:

  1. Will it affect the Greece balance of payments.

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    1. Of course it will affect the BoP. The refugee subsidies will be inflows in the Current Account. The Current Account plus the Financial Account make up the BoP.

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  2. The part to middle men will not be higher than for other Greek public works, 66%.

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  3. Please save us from more articles from that source, you can just as well read golden dawn publications.

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  4. In my view, if we tweak the current values we could have a good result from this crisis. 1st. The refugees should be treated like the germans treated the geistarbeiter in 1960es, that is, a temporary leave to remain in the country but subject to a clean criminal record. If children are born they don't get the greek nationality automatically.

    Basically we need to cream off the people who have western values. That is a desire to self improve, not a big attachment to religion and the past.

    A danish approach to bringing wives from the old country. i.e. non of that.

    So if they are unemployed and do not take the jobs that are available or they do dodgy dealings they are sent back to syria no ifs or buts, and their leave to remain is reversed.

    Then there will be no problem, and as most are able bodied they can start doing some work.

    Any of them that employ other people and pay taxes above a certain amount for 5 years get the citizenship after ten.

    Any islamic terrorism or even advocating it on the internet, or if they become a problem, this is removed and they go back.

    The overly religious will not like all this and will want to go back anyway, the rest can go to the UK which still builds mosques with public money.

    These rules are fair, but automatic granting of a life in europe should not be done. It needs to be earned.

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