Athens Digest 06.02.2018

• Swiss drugmaker scandal rocks Greek politics

• Dow crash could hold up bond announcement, final decisions this morning

• Government says Macedonia rally turnout claims “outrageous”

• Hints made at post-bailout tax ease

# Two former prime ministers and eight former cabinet members have reportedly been implicated in a bribery scandal that is roiling Greek politics. The government says it had ordered the results of a major pharma-corruption investigation to parliament. The ongoing probe is into alleged kickbacks paid by Swiss pharmaceutical giant Novartis for retail price manipulation and hospital access. Government officials called the allegations the worst financial scandal in the modern Greek history. They refused to name the officials implicated, but the news was greeted with angry denials from officials named in the news media, including former prime minister Antonis Samaras, Yannis Stournaras, the current Bank of Greece governor, and EU Commissioner Dimitris Avramopoulos. Samaras described the investigation as being politically motivated and personally directed by Prime Minister Alexis Tsipras. “Slander is the weapon of cowards,” Samaras said. “Those behind the attack will answer in court.”
Last night, Justice Minister Stavros Kontonis was summoned to an emergency meeting with the prime minister, and later told reporters: “Scandals that involve medicine have enormous moral implications.”
New Democracy urged authorities to make the results of the investigation public and allow members of the party to clear their name, and sharply criticised, accusing it of interfering in judicial process.
Novartis said it was cooperating with investigative authorities in Greece and abroad.
In terms of communication, Novartis case could possibly lead to better pre-election conditions for Syriza against New Democracy and the centre-left Movement for Change, a new alliance formed by PASOK. The conservatives maintain a strong lead over Syriza party according to recent polls. At the same time, Movement for Change has improved its performance.

# A decision on Greece’s next bond issue has been placed on temporary hold following the huge drop in US stocks. An announcement on the exact timing of the seven-year issue had been expected yesterday, but government officials said they would review the situation this morning following the news of the drop in the Dow Jones Industrial Average and concern in the White House. The delay was considered a precautionary action and not a change of the government pre-bailout exit planning.

# Meanwhile the government is hinting at providing some relief to taxpayers before the next election. “Some fiscal space is opening up to help people at the middle income level,” Finance Minister Euclid Tsakalotos told a regional government conference in Patras that was heavily attended by cabinet officials.
In Athens, Agriculture Minister Vangelis Apostolou met with representatives of protest-minded farmers who are threatening to block the country’s motorways.
He also said some relief measures may soon be possible, and vowed not to increase property taxes on farmland. Protest organizations described his commitments as being too vague, but did not say whether they would recommend the launch of motorway protests.

On our radar: Moscovici to address Greek parliament
Pierre Moscovici, the EU finance commissioner, is planning multiple meetings on his trip to Athens on Thursday and Friday, including talks with Prime Minister Tsipras and the country’s president, Prokopis Pavlopoulos. He will also meet leaders of the Greek enterprise and tourism federations, attend a business conference and give a speech in the Greek parliament on the future of European integration. The visit is considered significant as the government braces for its fourth and final review of the current bailout.