Athens Digest 12.02.2018

• Turkish warships block Cyprus drill, Tsipras says energy deals key

• Parliament will investigate Novartis, says speaker

• Knives out at New Democracy

• Bailout: February is all about deadlines

# Greece has promised Cyprus’ re-elected president Nicos Anastasiades closer regional and energy cooperation, as tension with Turkey again escalated over offshore drilling rights. Turkish warships yesterday blocked a vessel from Italian energy firm ENI from starting an exploratory natural gas drilling off the coast of Cyprus, arguing that the republic had no right to use resources that also belong to breakaway Turkish Cypriots. Briefing Cypriot journalists in Athens before the incident, Prime Minister Tsipras said Greece and Cyprus planned to deepen energy cooperation and build on regional agreements with Egypt, Jordan, and Israel.

# Parliament will proceed with an investigation of corruption allegations against top-rank politicians, Speaker Nikos Voutsis said in a weekend interview, fueling heated political confrontation. The president of the Hellenic Parliament told Athens municipal radio that parliament was set to form an investigative committee by the end of the month to examine bribery allegations involving Swiss drugmaker Novartis. He also said that bribery and money laundering are not time-barred and can’t be deleted. The committee, he added, would question confidential witnesses who provided key testimony.
The allegations have been made against the government’s political opponents, including Prime Minister Antonis Samaras as well Bank of Greece governor Yannis Stournaras and EU Home Affairs Commissioner Dimitris Avramopoulos, who have angrily denied the allegations as a cynical attempt by the government to weaken its opponents before calling a snap election.
In an unusually strongly-worded response, Stournaras told the ProtoThema Sunday newspaper: “I am undeterred by these attacks. I continue to act in the long-term interest of the Greek economy, and I will see to that those who slander me will be sent to prison, no matter how high up they are.”

# Kyriakos Mitsotakis, the conservative opposition leader, has unreservedly backed party members implicated in the alleged Novartis scandal, matching their angry rhetoric in attacks against the Tsipras government.
But the New Democracy leader was forced to try and put out a fire in his own party after the bribery allegations rekindled fierce factional rivalry within the party.
Among the accused in the scandal are the party’s deputy leader and former health minister Adonis Georgiadis, a former member of a rightist fringe party who remains at odds with the much of the party’s old guard.
Evangelos Antonaros, a former New Democracy government spokesman, was summarily expelled from the party after he criticised Georgiadis’ role in the party and as health minister. Antonaros called the decision illegitimate and vowed to challenge it.
Antonaros reportedly remained close to the former PM and party leader Costas Karamanlis who still wields strong influence in the party. Many other Karamanlis loyalists have, however, followed the party line and supported their implicated colleagues.

# Despite last week’s successful return to markets, and praise for Greece’s progress by Commissioner Pierre Moscovici, Athens has a tough week ahead.
Creditors are pressing the government to significantly increase the number of auctions on properties with defaulted mortgages, a demand seen as key to unlocking bailout funds at the February 19 Eurogroup meeting. The government is facing a sustained campaign of activism against the foreclosures from left-wing protest groups and is reluctant to take a hard line and prosecute demonstrators. The mission heads of the creditor inspection team are expected to return to Athens before the end of the month, as Greece prepares for its fourth and final bailout review.

# “From what we are starting to see, the new monitoring mechanism for Greece will relate debt relief measures to reforms” said Panos Tsakloglou, former representative of Greece at the euroworking group. During a radio interview, he also referred to the change of the EWG presidency: “Thomas Wieser’s role in the Greek crisis, despite what was often reported, was positive for Greece. Within the framework that governed his actions, the former EWG president supported policies towards keeping Greece in the eurozone and in any case helpful for the country. His successor Hans Vijlbrief is one of the most experienced members of the EWG”.

On our radar: Tax installment relief
Tax-weary Greeks could be granted some relief in 2018, as the government is working on a plan to increase the end-of-year installments from three to six, arguing that the change will boost government revenue.
Bailout creditors are, according to Greek news reports, not opposed to the plan, as Greece continues to meet and often outperform its fiscal targets, while total amount of unpaid taxes continues to rise.