Defying the expectations a few months ago, Greece remained in the Economic and Monetary Union. It recently succeeded in implementing sufficient reforms to earn another tranche of aid. However, the entire exercise exhausted whatever trust there may have been. It has also further soured Greece’s attitude toward the EU. This leaves officials ill-prepared to deal with other issues.
The refugee challenge is such an issue. The Financial Times reported that some EU officials are threatening to suspend Greece from the Schengen Agreement, which allows for passport-free travel since 1985. At the heart of the issue is Greece’s inability or unwillingness to tighten its borders and registration of the some 700k refugees.
Greece (and Italy) are frontline states for the people fleeing Syria, Libya, and other parts of Africa. They have complained of not receiving sufficient support from the other European countries. However from the EU point of view, the real situation is more like the old adage of taking a horse to water, but unable to make it drink.
The issue, they say, is that Greece has refused to accept the help that has been offered. Specifically, it has not called for a special mission of Frontex, the EU border agency that could assist. It is also unwilling to accept the humanitarian aid offered. Greece has also refused to improve its own processing efforts.
The home affairs ministers will meet before the weekend. The idea is that Greece will be given until the heads of state summit in the middle of the month to begin addressing these deficiencies or proceedings will begin, which could take three-months, that would lead to Greece’s suspension from the Schengen Agreement. To be sure, this agreement is not the same as EMU, so it would not be a Grexit in that sense.
However, many see Schengen as a keystone to EMU. The essentialists have made numerous claims of what is truly necessary for for EMU. When Cyprus was forced to adopt capital controls, some said this negated monetary union (a euro in Cyprus was not worth the same as a euro in Rome or Madrid, let along Frankfurt). We argued against such claims at the time, and there is not doubt that even though Greece too has had to put capital controls into place, that both countries remain members of EMU.
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