• Omnibus bill to wrap 3rd review of the ESM program to be voted on Monday amid turbulence
• E-auctions to help banks deal with red loans ahead of stress tests
• Calling a strike becomes harder – fierce reactions by trade unions
• Four new Casino licences in the “Hellinikon” project in Athens as well as in Crete, Mykonos and Santorini to be auctioned tied with tax incentives
• Government preparing for new bond auction – awaiting credit rating upgrade
• The Holy Synod of the Church of Greece opposes the use of the term ‘Macedonia’ for FYROM’s name
• Council of State rejects legal action by private TV stations against government tender
A comprehensive omnibus bill covering, among others, e-auctions, strikes and child benefits is expected to be voted on Monday by the parliamentary majority of Syriza/ANEL. Another contentious issue is the transfer of the shares owned by the government in 14 state-owned enterprises to the so-called “superfund”, officially the Hellenic Corporation of Assets and Participations S.A. Despite apprehensions voiced by some MPs we expect no surprises as the government narrative of the coming completion of the 3rd bailout in August seems to be holding the parliamentary groups together. FinMin Tsakalotos stressed that the institutions are expecting the prior actions to be completed by next Tuesday or Wednesday (January 17). The institutions are expected to prepare the Compliance Report ahead of the Eurogroup of January 22, which may green-light an installment of at least EUR5.5 billion to be disbursed in February.
The omnibus bill introduces e-auctions and the abolition of property auctions in courts by February 21. This is in essence a bypass to deal with mounting tension surrounding courts carrying out foreclosures. The government is especially concerned by the protests against foreclosures headed by former top SYRIZA cadres, such as former minister Panagiotis Lafazanis and former parliament chair Zoe Konstantopoulou. On Wednesday, only 7 out of 26 scheduled auctions took place. E-auctions are seen as a vital part of the process through which Greek banks can tackle the NPLs ahead of the stress tests expected to start in February.
The bill includes stricter provisions on industrial action, which make it harder for A-level trade unions to call a strike. A decision by a union to take industrial action will have to be taken with 50% of all of its active members present, while up until now such a decision required the presence of merely 1/3 of union members. Practically, this means that an A-level trade union will now have to secure a larger number of votes before calling a strike. Reaction by trade unions (especially by the representatives of the Communists party) has been fierce and a 24-hour strike has been called for Friday to protest the bill. There will be no metro and trolley bus services in Athens and no ferry services across Greece.
The omnibus bills kick-starts the procedure for the auction of four new Casino licences in the “Hellinikon” project in Athens as well as in Crete, Mykonos and Santorini. Two types of licences will be offered, one just for casinos (for 10-15 years) and another for wider facilities including hotels, restaurants, concert halls etc. for 20 to 30 years. The first estimate is that the tax leeway offered to investors will range from 4% to 17%.
Greece’s Public Debt Management Agency (PDMA) auctioned 13-week T-Bills on Wednesday. The yield was set at 0.99%, the lowest since October 2009, registering a significant drop from the yield (1.60%) of the previous auction (December 13, 2017). According to government sources the PDMA aims to issue a new bond, with a maturity most likely of three or seven years, even in January and well before the general election in Italy (March 4). Also, Athens expects an upgrade of its credit rating by Standard and Poor’s on January 19 and Fitch on February 16. The Bank of Greece announced on Wednesday that the ECB reduced ELA by EUR2.8 billion, with the ceiling now set at EUR22 billion. Car sales surged by 20.8% in 2017 y-o-y according to the Greek statistical office ELSTAT.
The Church of Greece expressed formally its opposition to the inclusion of the word ‘Macedonia’ in the future name of the Former Yugoslav Republic of Macedonia. Specifically, the Holy Synod, which is the supreme decision-making body of the Church of Greece, issued a statement according to which the use of ‘Macedonia’ is considered unacceptable as part of the name of another country. This intervention comes at a point when Greece and FYROM are engaging in negotiations to resolve the ongoing dispute over the name of the latter. Such a reaction is indicative of the resistance that the most conservative circles in Greece will put up to any mutually acceptable name that will result from the current negotiations. Meanwhile, it seems that there is a consensus to bridge any intra-government differences on the matter, as defence minister and ANEL leader Panos Kammenos appears to have smoothed his initial negative stance.
The Council of State – Greece’s supreme court – ruled against a temporary injunction motion submitted by four private TV channels against the government’s tender for TV frequencies. Alpha, Antenna, Skai and Star channels claimed that the decision by the government to limit the number of frequencies to seven was unconstitutional and asked for a temporary freeze of the tender. However, the plenary session of the Council of the State rejected the motion, thereby clearing the way for the continuation of the tender process.
On our radar: Τhe οmnibus bill contains an article (399) that, if it has retrospective effect, can facilitate the acquittal of three EU nationals, experts previously affiliated with the country’s privatization fund (HRADF) in 2013-2014, who are facing prosecution in the Greek judicial system. The Eurogroup has expressed its concern for this issue. The Greek government seems to be acting upon these considerations.