Athens Digest 01.03.2018

A surprise boost for the old guard in cabinet shuffle

Post-exit talks touch on labour rights

Capital controls: Banking slowly returns to normal

Full e-auction process starts amid more protests

Regling’s cautious optimism

# As expected, Prime Minister Alexis Tsipras kept his cabinet reshuffle to a minimum but his picks came with one surprise. Key vacancies were handed to the old guard of the left, starting with 71-year-old Yannis Dragasakis, the deputy PM who was given the additional portfolio of minister for the economy and development. The former senior Communist Party official is widely admired in the Syriza party as a moderate and soft-spoken heavyweight. Dimitris Vistas, 61, takes over as migration minister, another popular choice in the party. A bigger surprise came with the return of Fotis Kouvelis, 69, a one-time Syriza rival of Tsipras who formed a breakaway party which he eventually left. He replaced Vitsas as alternate defence minister.
The changes were forced on the government following the husband-and-wife resignations of Economy Minister Dimitri Papadimitriou and Rania Antonopoulou, a deputy labour minister after they collected housing assistance despite having several million euros worth of assets.
Opposition parties suggested Tsipras had picked old-guard leftists as he prepares for elections. And they mocked Kouvelis, the new Alt. Defence Minister, for abandoning a pledge never to worth with a government that included the right-wing Independent Greeks. Defence Minister Panos Kammenos, is the Independent Greeks leader. Kouvelis has reportedly been approached but rejected the candidacy for becoming the President of Democracy by the previous government parties (ND and PASOK) in the autumn of 2014. The parliamentary procedure for the election of the President failed in December of the same year thus leading to elections in January of 2015 and the win of SYRIZA. Kouvelis still rejects the claims he was offered and denied the position.

# Mission chiefs are set to wrap up talks in Athens today following back-to-back meetings with ministers that included a weighty agenda for Labour Minister Effie Achtsioglou. Government officials said the restoration of pay-scales and labour rights, axed or restricted under bailout-related measures, had been discussed at the minister’s meetings. The issue is of major importance to the Syriza government which says it has put off but not abandoned a pledge to restore employment rights.Today’s talks would concentrate on market reforms and the government’s much awaited growth strategy.

# With an eye on the end of the bailout, the government has further eased capital controls, allowing Greeks to open bank accounts normally for the first time since the summer of 2015. Under the changes announced by the Finance Ministry, the monthly cash withdrawal limit was also raised from 1,800 to 2,300 euros, ending longstanding daily limit equivalent of 60 euros.The restrictions were introduced during a standoff between the Tsipras government and lenders in 2015 that triggered financial upheaval and saw Greece on the brink of euro exit. Banks were closed for three weeks in an effort to stabilize the system.

# An online-only process for auctions of foreclosed properties began in Athens and several parts of Greece yesterday, as the government struggles to fulfill commitments to lenders to significantly boost the number of sales. Demonstrators returned in larger numbers to try and block access to notary public offices. Riot police scuffled with protesters and used pepper spray to disperse one group. Protest groups, including one led by a former Syriza energy minister Panagiotis Lafazanis, are working closer together to try and disrupt the auctions. Leaders of a powerful Communist trade union have also promised to wage a nationwide campaign of disruption.

# Klaus Regling, the ESM managing director, is heading to the Delphi Forum in Greece with cautious words of encouragement. Regling told the Institutional Money Congress in Frankfurt, that his fellow Germans often underestimated the extend of reforms that had been carried out in Greece.He expressed confidence that the country will successful exit the bailout program but only if implementation of reforms continue. “If the government remains on a course of reform then it should be able to make a return and regularly finance itself on the market” he said.

On our radar: Papandreou returns to back cannabis bill
Former Prime Minister George Papandreou has rarely spoken in public since the creation of his ill-fated breakaway Socialist party in 2015. He was later accepted back in silence. But he returned to parliament yesterday to speak on an issue he has long campaigned for the decriminalization of cannabis.Outlawing marijuana, he said, had led to countless pointless prosecutions, created powerful criminal networks, and squandered police resources over decades. He spoke as lawmakers debated draft legislation to allow commercial cannabis growing for medical use, a venture now seen as an important growth opportunity. Following the debate, the bill was approved with votes from government MPs and the Socialist opposition.