Sources

Italy Is Closing The Borders, And Nobody Can Blame Them

Finger pointing isn't going to help Italy solve its migration problems. What it needs is help, and for the EU to stop dilly-dallying. A view from Berlin.

Demonstration against the closure of Italian ports in Rome on June 11
Demonstration against the closure of Italian ports in Rome on June 11
Klaus Geiger

-OpEd-

BERLIN — Italy has closed its ports, letting the Aquarius, a ship with more than 600 migrants on board, drift in the Mediterranean. And right off, the roles have been assigned: The partly right-nationalist Italian government are the bad guys; the good guys are the ones invoking humanity: the German chancellor, the EU, the UN.

But whoever reduces what's going on to a parable of biblical simplicity is disguising — possibly deliberately — the complex reality. There's no good and evil in this story. Instead there's a migration policy that, for or at least a decade now, has been characterized by half measures and convenience.

What we're experiencing is not a new era of inhuman, nationalist migration policy, but the epilogue of years of Mediterranean tragedy.

For too long, Germany and Europe have been leaving Italy — the first port of call for African migrants — on its own. When Silvio Berlusconi criticized the Dublin system, which places the burden of migration on coastal states, he was ignored. When Matteo Renzi, who was for a short time Italy's hope, did the same but somewhat more diplomatically. He, too, was ignored.

italy_ports

The Aquarius ship in Cuxhaven on January 24, 2012 — Photo: Ra Boe

There was a point when Italy chose to put pressure on the EU by waving migrants through to northern Europe. There was another when the country opted instead for cooperation, registered the migrants that had reached its shores and hoped for something in return from the EU. But the response from Berlin and Brussels was always inadequate.

Last year, the Italian government pulled the emergency brake and negotiated a refugee deal with Libya, along the lines of the one the EU made with Turkey. Too late, as it turns out. The deal did indeed reduce the number of arriving migrants to a fraction of the previous level, but just as in Germany, the shockwaves of the carelessness of 2015 continue to be felt to this day. The years before the Libyan agreement also had a lasting impact in Italy and carried the anti-establishment parties to election victory.

For too long, Germany and Europe have been leaving Italy on its own.

And so now, the new government issues the well-known threat in a radical Trumpist manner: If the EU does not help us, we'll just send the migrants back.

Rome's crackdown can also be an opportunity. It could help the EU come up with a fair migration policy more quickly. This should consist of three elements. First, protection of the EU's external borders. Second, the deportation of migrants who don't have the right to stay. Third, a fair distribution across EU countries of recognized asylum seekers. This is the best response to the new Italian government: the rule of law and solidarity, instead of division between good and evil.

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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