Athens Digest 30.03.2018

• Banks on track in reducing bad loans says Bank of Greece

• IMF says debt talks ‘intensified’

• DESFA bidders told to submit better offers. First prices offered exceed EUR400 million

• Unions, employers sign collective wage agreement ‘aimed at future’

• EIB, Piraeus Bank announce EUR100 million energy efficiency investment scheme

# Greek banks have met closely-watched targets to reduce the stock of troubled and non-performing loans, with their performance improving in late 2017, the Bank of Greece said. A report said the total amount of so-called non-performing exposures fell to EUR95.7 billion or 43.1 percent of the total by the end of last year, slightly better than targets monitored by the central bank. The end-December figure was 10 percent lower on the year and 4.8 percent lower from three months earlier. “The NPE ratio still remains high across most asset classes. For end-December 2017, the NPE ratio is 43.4 percent for residential, 49.3 percent for consumer and 41.8 percent for the business portfolio,” the bank said.
Separately, Bank of Greece Governor Yannis Stournaras said he expected the economy to grow by at least 2 percent this year, describing 2018 as a “landmark year for Greece to return to normality.” He urged the government and creditors to provide greater clarity on the framework of post-programme surveillance and consider alternative back-stop options to a precautionary credit line.

# While Greek MinFin focuses on conducting the Greek holistic growth plan which is expected to be discussed in the next Eurogroup meeting (Sofia, April 27th), negotiations which may lead to the activation of the Greek in principle programme with the IMF continue. Fund spokesman Gerry Rice said talks on debt relief for Greece involving European institutions had “intensified.” But he insisted the IMF has no timetable, denying reports of a possible April 1 announcement.

# Privatization agency HRADF has told bidders for a controlling stake in gas grid operator DESFA that they must improve their offers. Two consortiums are competing for a 66 percent stake in the company: The first is made up of Italy’s Snam, Enagas Internacional of Spain and Belgium’s Fluxys. The second: Romania’s Transgaz, Spanish Reganosa with backing from the European Bank for Reconstruction and Development (EBRD). Yesterday’s development means the preferred investor will be named after a future round of bidding. After yesterday’s announcement, Energy Minister George Stathakis said: “The first round of bidding for 66 percent of DESFA has been completed. The price offered exceeds EUR400 million … That was within the range set by the two independent evaluators. Then the second round of improved bids will now begin and will be completed in a few weeks.” Greek government was hoping that the sale could exceed the EUR400 million mark offered by the Azerbaijani SOCAR back in 2016.

# Unions and employers have signed a collective wage agreement _ essentially reviving the institution after six years _ in hopes that the deal could help heal problems in the country’s labour market after the bailout programme. “We have signed the 2018 National General Collective Labour Agreement, looking to the future of employment and production and out of respect for our institutional role,” said the Chairman of the Hellenic Federation of Enterprises (SEV) Theodore Fessas “A comprehensive and ongoing social dialogue between businesses, workers, and the state is what creates the necessary consensus in all countries that progress and prosper. This is the challenge for our country: that after August 2018 we can return to European norms and stand on our own strength.” The Greek minimum monthly salaries remain legally fixed at EUR586 and EUR511 for under-25s, but unions and employers said it was important to keep the institution of the collective agreement alive.

# Energy bills for companies across Greece will be reduced by new energy efficiency investment backed by a new EUR 100 million initiative by the European Investment Bank and Piraeus Bank. Under the scheme dedicated financing for new investment to reduce energy consumption by small-scale energy users will be provided across the country. Technical and financial expertise gained from energy efficiency investment programmes elsewhere will be used to strengthen new projects in Greece. This operation is the first initiative in Greece under Private Finance for Energy Efficiency programme and represents the largest engagement in any European country so far.

On our Radar: Red faced and film-friendly
Government officials issued a furious reaction after a state panel of archaeologists banned access to a British TV crew to film a spy drama near the ancient temples at Sounion. The crew is shooting scenes of the TV adaptation of John le Carre’s “The Little Drummer Girl” that is due to air next year in a BBC co-production with U.S. cable network AMC. The decision was announced days after the government announced incentives to lure foreign film productions to Greece. Lefteris Kretsos, general secretary of the government’s media and communication department, described the decision as an “international embarrassment.” Government officials privately said they hoped the request could be resubmitted to address the archaeologists’ objections.