Athens Digest 05.03.2018

• Government reiterates opposition to precautionary credit line

• PM insists he is committed to reforms

• Two Greek soldiers to stand trial today for illegally entering Turkey

• Binding bids expected today for oil & gas exploration rights in Ionian Sea, Crete

# Insisting on the need for a clean exit from Greece’s bailout program in August, the Greek government reiterated its opposition to a precautionary credit line at the weekend. Speaking at the Delphi Economic Forum, cabinet’s VP and newly appointed Economy Minister Yiannis Dragasakis said a credit line would be tantamount to a “semi-memorandum.” His comments came amid a public row over the issue between the government and the Governor of the Bank of Greece Yiannis Stournaras, who repeated on Saturday that a precautionary credit line will provide the country with added security. In response, Digital Policy Minister Nikos Pappas derided Stournaras, a former Finance Minister, for insisting on a policy that failed when he was minister.

# Even though former Euro Working Group President Thomas Wieser noted on Friday that a precautionary credit line would serve as safety net and not as a new adjustment program, he stressed that this was “rather unlikely,” as neither the Greek side nor its European partners seem to want it.
For his part, European Stability Mechanism (ESM) Chief Klaus Regling said it was too early to speak about a credit line and that it was up to Greece to ask for one. He added that Greece will come under stricter supervision compared to other countries that emerged from bailout programs if it is given debt relief. Greece, he said, must implement what has been agreed and push reforms through after August.

# Addressing the Delphi Economic Forum Prime Minister Alexis Tsipras repeated a total of eight times his government’s intention to meet its commitments to the country’s international lenders. His remarks were seen by Brussels as a clear statement that his government’s reforms course is irreversible, including pension cuts, which are to be implemented in 2019. Tsipras also said he was more optimistic than ever that Greece is nearing the completion not just of a review but of a comprehensive settlement, and sought to assure the country’s partners that this will be mutually beneficial. Bailout institutions are seeking to wrap up the fourth bailout review when mission chiefs return to Athens in May. European Commission mission chief Declan Costello said the goal is to reach a staff-level agreement by the Eurogroup on May 24.

# Two Greek soldiers will stand trial today in the Turkish city of Edirne on charges of entering a prohibited military zone after they crossed the border into Turkey while on patrol in bad weather conditions last week. Greek deputy Defense Minister Fotis Kouvelis has called on the court to take into consideration that the two men were on patrol in dire weather conditions and that the heavy snowfall made them lose their way. The two soldiers, Angelos Mitretodis and Dimitris Kouklatzis, were arrested on Thursday and were remanded in custody after a court order on Friday. Greece says it is in consultation with Turkish authorities and has called for their “swift return”.

# A consortium comprised of energy giants ExxonMobil, Total and Hellenic Petroleum (HELPE) is expected today to submit a binding bid for exploration activity rights in two areas situated west and southwest of the island of Crete. Interest is also expected from the Italian Eni, the American Noble and Israel’s Delek. Both the American and Israeli groups are already active in the Eastern Mediterranean, having proceeded with gas extraction in Israel’s EEZ. Eni and Total have recently made what is believed to be a large gas discovery at their Calypso prospect in the Block 6, offshore Cyprus.
Binding bids are also expected today for hydrocarbon exploration rights in the northwestern part of the Ionian Sea, with Greek upstream independent Energean having expressed the most intense interest. The company operates the Karish and Tanin development leases, offshore Israel. Whether official interest in the particular acreage is going to be expressed from the part of the Spanish energy firm Repsol, remains to be seen. According to estimations, investments demanded for the exploration phase could reach up to $300M. Over $6bn will have to be invested, in case exploitable fields are found in the areas concerned.

# A terror suspect who went on hunger strike to protest his transfer to a penitentiary in Larisa in central Greece in late February will be returned to the capital’s Korydallos maximum security prisons. The transfer late last month from Korydallos prison of Constantinos Giagtzoglou, 29, triggered a spate of violent attacks in Athens and protests in solidarity. Giagtzoglou is accused of sending a parcel bomb last May that seriously injured Lucas Papademos, former prime minister and ECB vice president. The decision led to accusations that the leftist-led government caved under the pressure of the repeated anarchist attacks to accept his request to return to Korydallos. “(The government) is now giving in to blackmail,” said the conservative New Democracy party in a statement. “The government is incapable of tackling lawlessness either due to its ideological obsessions or due to incompetence,” it added.

On our radar: Greek population declining, youth unemployment staggering
Greece’s population is declining and by 2050 the country will, according to projections, have 10 million people in the best case and 8.3 million in the worst, according to a report by the ‘Dianeosis’ research and policy institute. The data showed that the population decline that has been observed during the country’s financial crisis is the first since WWII. Referring to the poverty level in Greece, the managing director of Dianeosis Kyriakos Pierrakakis told the Delphi Economic Forum that it has fallen from 17 percent of the population in 2013 to 13.6 percent today. The data concerning youth unemployment was alarming, as one in four people aged between 18 and 29 are unemployed compared to one in 40 over the age of 65. Moreover, 75% of people below the age of 35 are thinking of leaving the country, while 48 percent of them say their primary source of income is from their families and have very little confidence in institutions.