Athens Digest 22.03.2018

• Tsipras to take Turkey to task at European Council

• Athens under pressure to deliver energy reforms

• FYROM – name talks resume amid Russia’s NATO warning

• Greece rapped on roadworks costs by EU spending watchdog

# Prime Minister Tsipras is expected to call for stronger European support in facing what Athens views as renewed Turkish hostility in the region. Attending today’s European Council, Tsipras will join Cypriot President Nicos Anastasiades in highlighting a series of recent actions ordered by Ankara: Harassing natural gas exploration off Cyprus’ coast, detaining two Greek border patrol soldiers, and repeated remarks by Turkish official questioning Aegean Sea boundaries. Turkey’s relations with western nations have also become increasingly strained. German Chancellor Angela Merkel strongly criticized the ongoing Turkish military offensive in northern Syria. Tsipras will, however, will make his case as European leaders grapple with a daunting agenda, including more Brexit complications, U.S. trade worries, and efforts to hold global tech firms more accountable.

# Despite growing European consternation with Turkey, and sympathy with Athens’ view, Greece remains under international pressure to speed up pre-exit bailout commitments. Creditors insist Athens needs to press ahead with energy sector reforms, warning that further delays could complicate Greece’s bailout exit timeline. At home, the government is also fighting to manage post-exit expectations, with growing demands to end tough spending controls following years of crisis. The latest demand comes from the Greek local government association which is seeking a seeking a six-month contract extension for sanitation workers.

# Talks with the former Yugoslav Republic of Macedonia resume in Skopje today in an attempt to resolve the name dispute, following a new warning from Moscow that it strongly opposes the country’s ambition to join NATO. Foreign Minister Nikos Kotzias is travelling to Skopje, while the negotiations will continue in Vienna on March 29-30. Greece blocked FYROM’s accession to NATO in 2008, but the two countries are now hoping to have the name dispute finally settled before the July 11-12 NATO summit in Brussels. Wary of that development, Russia’s Deputy Foreign Minister Alexander Grushko summoned FYROM’s ambassador to Moscow Goce Karajanov on Tuesday. “The Russian side indicated that plans to pull (FYROM) … into NATO might have negative consequences for regional security and bilateral relations,” a Russian Foreign Ministry statement said.

# A European budget watchdog has rapped Greece for failing to control spending on several EU-supported motorway projects. In a report issued by the European Court of Auditors, the agency found overruns the public-private partnership projects in France, Greece, Ireland and Spain between 2000 and 2014.  “In Greece _ by far the largest recipient of EU contributions, with €3.3 billion or 59 percent of the total _ the cost per kilometer of the three motorways examined rose sharply by up to 69 percent, while the scale of these projects was considerably reduced by as much as 55 percent,” the report said.

On our Radar: Pension systems’ bleak outlook
Despite major pension reforms in Greece and more cuts planned in 2019, the outlook for the country’s pension system remains bleak, according to an assessment prepared for the European Central Bank. Greece, Italy, and Cyprus are predicted to have a huge increase in their old age dependency ratios (the number of plus-65s compared to working age adults) that are all set to exceed 60 percent before 2070. The ageing and eventually shrinking population across the Euro area is likely to pressure governments into further increasing the retirement age, the authors said.