Athens Digest 07.03.2018

• Greece seeks international help on arrested soldiers

• Regling hopes for no return to “previous habits”. Tax rates reduction will strengthen growth potential, he says

• Centeno: Post bailout Greece a different country

• Rail operator the sole bidder for maintenance firm

• Militant Neo-Nazi suspects arrested

# Greece is seeking international help to try and negotiate the return of two soldiers arrested in Turkey while on a border patrol. Prime Minister Alexis Tsipras spoke to U.N. Secretary-General Antonio Guterres as Athens fears that the issue could further stoke tension with Turkey. Defence Minister Panos Kammenos at a meeting with EU colleagues in Brussels, also briefed EU foreign policy chief Federica Mogherini and senior NATO officials. The two soldiers have been jailed in the border town of Edirne after straying across the border and are facing trial for illegally entering the country.
Kammenos described the incident as routine and urged Turkey to deal with it as a minor military issue. Mogherini called on Turkey to ensure that the issue was resolved with a “swift and positive outcome.”

# While the implementation of the last 88 prior actions of the current Greek bailout program within a few weeks remains a challenge for the government, the European institutions refer to both: the improvement of the Greek economy and the no way back road to “previous habits”. In an interview with SKAI TV, the ESM managing director Klaus Regling said that Greece should not return to policies which led to a tough adjustment. He also added that the country’s fiscal package till 2020 should include tax reduction: “I think it is important to reduce tax rates and strengthen the growth potential.”

# At the same time, Mario Centeno, the new Eurogroup president, says Greece’s economy has fundamentally changed as a result of its gruelling eight-year adjustment. “Nearly every sector of the economy is now sustainable…The budget went from running a deficit of 15 percent in 2009 to now running a surplus,” he told a state-run Greek news agency. Centeno said Greece remained vulnerable to outside and domestic shocks but that it was rebuilding its credibility on international markets and was prudently creating a cash buffer to coincide with the end of the bailout programme.

# Greek rail operator Trainose has submitted a binding offer for the 100 percent acquisition of Hellenic Company for Rolling Stock Maintenance, in the latest step towards privatising the country’s rail system. Privatisation agency HRADF said Trainose was the sole bidder. The rail operator was sold to Italy’s Ferrovie dello Stato in a deal signed last September, as Greece was obliged to sell off the once-heavily subsidised firm.

# In a series of raids in Athens and two other cities, police have seized material used to make explosives and arrested five people accused of being members of a Neo-Nazi terror group. The operation was coordinated by the anti-terrorism division and led to the seizure of 50 kilograms of ammonium nitrate, as well as shotguns, knives, and bats. Police are investigating whether the suspects are linked to the UK-founded Nazi group Combat 18, its name taken from the initials of Adolf Hitler, as well as their possible connection to arson attacks against independently run migrant shelters and against left-wing activists. Police officials said 11 locations were raided yesterday in greater Athens and the northern cities of Ioannina and Serres.

On our radar: Zaev’s proposal for international treaty
Greece and the former Yugoslav republic of Macedonia could settle their constitutional dispute with an internationally-brokered treaty, the country’s prime minister has suggested. Zoran Zaev made the comments after again rejecting Greek demands that a settlement could only be reached if Fyrom commits to changing its constitution. Zaev countered that any constitutional change could later be reversed, adding that a treaty would be binding for both countries. He also referred to a “change of the Greek constitution” causing tension and negative publicity in Greece. “Let us open the constitution of Greece and see how they show their concern for Greeks outside Greece”, he said, adding that he is ready to do the same with “Macedonians” outside “Macedonia.”
The Zaev government is hoping to avoid a domestic political clash over its name negotiations with Greece, as the country is still struggling to emerge from months of political upheaval, and as political opponents are escalating public protests against a compromise with Greece.
U.N. Secretary-General Antonio Guterres spoke to both Zaev and Greek PM Alexis Tsipras on efforts to reach an agreement by the summer under talks being mediated by the United Nations.