Athens Digest 09.02.2018

• Bond return hits cash target in minutes

• Moscovici: Greece on track for June deal

• Institutions back in Athens probably earlier than expected

• BoG Stournaras says he’s target of dirty tricks campaign

• Terror group gunman granted second furlough


# Greece’s first test of the markets this year showed strong investor interest, calming government anxiety at the end of a turbulent week in global markets.
After a two-day delay, the government auctioned a seven-year bond, easily hitting its EUR3 billion at a rate that sank slightly from the starting point to 3.5 percent.
Offers were double the target in the first hour, financial officials said.
Finance Minister Euclid Tsakalotos said the sale vindicated the government’s position that Greece can exit the bailout without a backup loan from creditors.
“Today’s (auction) demonstrates that not only can we raise new funds, but that we can do so in unfavorable conditions,” he said.

# Pierre Moscovici, the EU finance commissioner, said Greece is on track for a bailout exit deal by late June and praised reforms by the Tsipras government.
On a two-day visit, Moscovici backed Greece’s desire for a “clean exit” from the bailout in August. “When you’re in the program, you’re in the program. When you’re out, you’re out,” he told the prime minister.
Lenders are negotiating the terms of Greece’s exit: Post-program surveillance of reforms in exchange for debt relief and also tying repayment terms to growth rates to avoid heavy commitments in a recession.
Post-bailout monitoring “won’t be something special for Greece,” he said. The question is “what sort of supervision will be needed: Not an intrusion by EU officials so that it allows the government to take charge of its growth strategy.”
Members of a Euro working group met in Brussels yesterday to examine outstanding reforms in Greece, setting a February 19 deadline for their completion.
Moreover, according to a Greek source, the next mission of the institutions in Greece will take place earlier than expected, probably on February 26th.

# Bank of Greece Governor Yannis Stournaras lashed at the government yesterday, accusing it of waging a dirty tricks campaign against him in an effort to remove him from the post. Stournaras, who served as finance minister in the previous conservative government, is one of 10 politicians named in a judicial investigation into alleged bribes paid by Swiss drug-maker Novartis to boost price and market-share of its drugs. “The effort of some to involve me and my family, in the Novartis scandal, will fall flat,” he said in a statement. “My record is totally clear … and cannot be tarnished by those who seek my extermination. It follows similar attacks that I have suffered for the last three years and has a single purpose: My expulsion from the administration of the Bank of Greece administration.”
Politicians named in the investigation continued their strongly worded attacks against the government, demanding that parliament be allowed to question three protected informants whose testimony formed the basis of the allegations against them. The government said attacks were designed to try and intimidate the judiciary. Prime Minister Tsipras chaired an executive committee meeting if his left-wing Syriza party to discuss developments in the Novartis scandal.

# Convicted terror group gunman Dimitris Koufodinas is due to receive a second prison furlough in three months, despite protests from the families of victims and government officials from the U.S. and Britain. Koufodinas serving life for participating in 11 assassinations carried out by the far-left armed group November 17. Its victims include officials from the United States, Britain and Turkey, as well as Greek politicians, publishers, and businessmen. Using the code name Loukas, Koufodinas evaded arrest for years, posing as a beekeeper and a maths teacher. He has never expressed remorse for his actions, and defending in an autobiography he wrote in prison. 17N group members were arrested in the wake of failed bomb attack in 2002.



On our Radar: Post bailout rethink proposal
A Greek think-tank is calling on the government and rescue lenders to revise existing agreements, lowering budget surplus targets to better manage the country’s debt management, social insurance, and tax system.
In the proposal, conducted by former MinFin Nikos Christodoulakis, prof. of insurance science Miltiadis Nektarios and former Public Revenue Gen. Sec. and MP Harry Theoharis, the think-tank diaNEOsis said the revised deal would allow the public investment equivalent to 2 percent of GDP, creating 350,000 new jobs by 2030, EUR2 billion additional tax revenues, and debt reduction below 100% of GDP by the middle of the next decade. The study has been already presented to experts of the institutions. Nevertheless, a revise of the country’s fiscal targets remains unlikely.