Athens Digest 16.02.2018

• Greece in catch-up race for prior actions ahead of Eurogroup

• Tsakalotos promises post-bailout reforms to investors

• Asset committee chief: Privatisations won’t end with bailout

• Turkey has reached the red line, says Foreign Minister Kotzias

• NATO’s Stoltenberg asks for flexibility from Greece, FYROM but avoids criticism of Turkey

• Ahead of parliament showdown, Tsipras sued by predecessor Samaras over Novartis scandal

• Parliament asked to ratify landmark oil-and-gas deals


# Monday is a public holiday in Greece, marking the start of Lent. But not for Finance Minister Euclid Tsakalotos. Eurogroup ministers will review the progress, or lack of, made on key demands for the disbursement of EUR 5.7 billion. They include progress on plans for a major Athens seaside development at Hellenikon as well as on the privatisation of natural gas operator DESFA, and improvement on the number online property auctions needed to reduce stress on banks from non-performing loans.
In Washington DC, IMF spokesman Gerry Rice said there was no decision yet on when the Fund’s mission would return to Athens. Possible activation of the IMF Greek ‘in principle’ program, he said, could not happen until details of the debt relief promised to Greece were made clear.

# Meanwhile, during a visit to London and Paris, Finance Minister Euclid Tsakalotos gave investors the message that reforms will continue and there will be no bureaucratic obstacles to privatizations even after the end of the Greek ESM programme. The minister met with institutional investors to discuss negotiations on post-bailout arrangements with creditors and Greece’s planned return to markets, ahead of a sovereign upgrade expected from ratings agency Fitch today.

# The head of Greece’s powerful state assets committee says privatisation plans will not end with the country’s bailout in August. Rania Ekaterinari told Reuters that Greece would honor commitments made to lenders to seek EUR 3 billion over the next year through sales in stakes that include Athens International Airport and natural gas company DEPA. Greece is meant to use half of its privatisation revenue towards reducing the national debt but has so far only met a fraction of its overall target.
Officially named the Hellenic Corporation of Assets and Participations, or HCAP, the agency was created two years ago and will control state assets for 99 years. Rescue creditors have frequently set progress in delayed privatisation projects as a condition for upcoming loan disbursements.

# “Turkey has reached and somehow crossed the red line as far as Imia is concerned,” Foreign Minister Nikos Kotzias said in an interview with Alpha TV. Last Monday, a Greek coast guard vessel was struck by a Turkish one near the islets, causing a sharp escalation in tension between the two countries. Kotzias warned there would not be another peaceful response by Greece if a similar incident occurred again.
Referring to the negotiations with FYROM, the Greek minister said: “Hopefully, before the end of February, I will have submitted a draft agreement for consultation.”

# Jens Stoltenberg, the NATO secretary general, urged Greece and FYROM to show flexibility in finding a solution for the name dispute but avoided any criticism of Turkey over this week’s spike in tension in the east Mediterranean. “I will be very careful speculating about the likelihood of an agreement. It’s an issue that’s been addressed for more than 20 years,” Stoltenberg said at the end of NATO defence ministers’ meetings. “I urge them to be flexible and to try to find a solution.” On the Aegean, he said he had encouraged officials from two countries to maintain direct contact “to reduce tension and avoid escalation.”
Prime Minister Tsipras visited the Greek coast guard headquarters and criticized Turkey for “putting lives at risk” following this week’s collision between Greek and Turkish coast guard ships in the east Aegean. “Our eastern borders are the borders of the European Union, and that’s something that should not be forgotten by those who dream of creating (sovereign) grey areas,” Tsipras said.

# Former prime minister Antonis Samaras has filed a criminal complaint against his successor Alexis Tsipras and seven others over allegations made against him in the Novartis medical bribery scandal. In the 56-page complaint, Samaras said he was suing for perjury, defamation, and abuse of power. Others included in the complaint were the deputy Justice Minister Dimitris Papangelopoulos, three senior prosecutors, and two confidential witnesses.
Parliament next Wednesday is due to debate and vote on a government proposal to set up an investigative committee to examine the allegations against Samaras and nine other senior politicians, including Bank of Greece governor Yannis Stournaras. Dimitris Avramopoulos, the EU Home Affairs Commissioner, is among those named in the allegations but will not attend the parliament session. He is due to join a multi-stakeholder meeting on migration at the United Nations headquarters in New York.

# Contracts for oil-and-gas exploration in western Greece have been submitted to parliament for ratification. A consortium of France’s Total, Italy’s Edison International, and Greece’s ELPE signed a deal with the government last year to explore and exploit offshore hydrocarbons in an area west of Corfu. Ratification was also requested for similar agreements made with ELPE and Energean in other parts of western Greece. Energy Minister George Stathakis told a conference that Greece’s broadening energy resources would help the country meet its obligations to the European Union to expand the use of renewable energy sources. The current ratification process, he said, would serve a model for oil-and-gas deals in other parts of the country.



On our Radar: Property woes
Greek house prices have continued to drop despite the country’s emerging recovery, according to Bank of Greece data. Apartment prices nationally fell another 1 percent in 2017, bringing the average to 41 percent lower than when the recession first hit a decade ago. The slump has added pressure on the government to correct its outdated gauge used for property tax, with the so-called “objective values” mostly reflecting the pre-crisis market. A property owners association representing an area in the north of the capital has launched new legal action against the government over its tax gauge.