Athens Digest 23.02.2018

• Green light by top Greek court for “Hellenikon”, a major Athens development project

• Parties stay in attack mode after corruption vote

• Athens seeks EU help in dealing with Turkey threats

# A top Greek court has approved a major urban seaside development project south of Athens, helping Greece comply with demands by bailout creditors. The Council of State ruled that the EUR8 billion Hellenikon project on the grounds of the city’s old airport and Olympic venues was not in violation of the constitution or environmental protection laws. A consortium led by Greece’s Lamda Development will develop the 1,500-acre space to create a park, residential, amusement, and business real estate.
Eurozone finance ministers at the start of the week delayed a bailout loan disbursement pending the court decision and progress on online property auctions to tackle the high level of non-performing loans.

# The government and opposition stayed on the offensive following parliament’s vote to set a Committee to investigate criminal allegations against ten of Greece’s most senior politicians. Andreas Loverdos, the former health minister now officially under investigation, described Prime Minister Tsipras as a “person who acted like a gang leader,” pinning false allegations on opponents for political gain. New Democracy demanded that protected witnesses who have been key to the case so far be interviewed by lawmakers on the committee. It claimed the government had overplayed its hand in handling the scandal and had suffered a political “Waterloo moment.”
Opposition parties have asked for more investigation time as one month will not be enough for the mission of the parliamentary committee. “It is obvious that the government will not investigate anything at all within a single month, and will simply attempt to preserve the plan of slandering… I continue my work and within the framework of my responsibilities in the European Commission” said Commissioner Avramopoulos who is also under investigation. Dimitris Tzanakopoulos, the government spokesman, accused opposition parties of “trying to threaten and intimidate witnesses and judicial officials.”

# The special parliamentary committee will investigate the 10 politicians over the allegations that they took bribes or otherwise benefitted from bribes allegedly paid out by the Swiss pharmaceutical firm Novartis. It is due to be set up next week, with 21 members, 10 from Syriza, five from New Democracy, one from ANEL (junior government coalition party) and one from each of the other parliamentary parties.

# Greece and Cyprus are urging European countries to take Turkey to task over its naval obstruction of gas drilling off the coast of Cyprus as well as hostile air and sea patrols in the Aegean. Prime Minister Tsipras is expected to meet several European leaders on the sidelines of the EU summit, including Germany’s Angela Merkel and French President Emmanuel Macron.

# Turkey’s energy minister said yesterday that his country would not allow “unilateral’ gas exploration to be carried out by Cyprus, further escalating tension. At his Brussels meetings, Tsipras will also discuss efforts to resolve the name dispute with the Former Yugoslav Republic of Macedonia.

On our Radar: Citi’s sobering forecast
After a very long wait, the good news coming out of Greece is getting a lot of attention: Three upgrades from ratings agencies since the start of the year, and a continued target-beating performance on key budget numbers, all welcomed by the Greek Ministry of Finance as they support the “clean exit” from the bailout programmes. A sobering note, however, came from Citibank’s global forecast that sees growth in Greece reaching just 1.2 percent of GDP this year, in contract to the European Commission figure of 2.5 percent. The bank said it did not expect the debt relief package being prepared for Greece to be as significant as the country’s government expects, and described primary budget targets of 3.5 percent as being beyond Athens’ ability to deliver. This may lead to upfront implementation of all upcoming fiscal measures, in 2019.