The refugee shock: Potential impact on Greece

Text of a talk to an audience of international investors, 3rd December 2015

The refugee crisis is one of those big historic events that are very hard to evaluate as they are happening. We are appalled by the humanitarian tragedy, the uprooted families, the drowning children; but it is very hard to know what the long-term impact will be on our society or on the lives of those refugees and migrants who survive and settle in Europe.

In cases like this, history alone cannot tell us what will happen, because the context is unique and complex. And there is no analytical model that we can use to forecast the whole phenomenon; we can use analytical thinking on some aspects of the process, but only on aspects. The whole involves politics, and economics, and culture, and institutions. It involves local communities, and nation states, and international relations. And it involves the next 3 months as well as the next 30 years.

In the end we can only make an educated guess how the whole will play out.

I will try to contribute to this, as a someone who has been observing the Greek economy from the bottom up, as well as the mentalities and the institutions that shape economic behaviour. Continue reading