Athens Digest 02.04.2018

• Government to scrap plan to further tax large properties

• EBRD chief says clean exit from bailout “possible”

• War of words between Greece and Turkey over detained soldiers

• Water supply gradually restored to Thessaloniki after five days

# Plans by the government to increase the supplementary tax on properties worth over EUR 200,000 are expected to be scrapped after objections raised by the institutions which do not want to link property tax with social policy. According to Kathimerini newspaper, the government was pursuing this course of action so as not to further burden homeowners with increases in the highly unpopular Single Property Tax (ENFIA) in working class areas where the upcoming adjustment of the taxable property rates (known as objective property values) are set, according to non-binding recommendations by property appraisers, to spike drastically in order to approach real prices. The government planned to transfer the increased burden stemming from the adjustment of the objective values to 500,000 owners with property over EUR 200,000. However, the institutions have informed Athens of their objections saying that it must not further burden medium and large properties. Given the potential political cost and bearing in mind the next election cycle, the government is reportedly examining two options –namely to either calculate this year’s ENFIA using existing objective values or the new adjusted prices. If the latter is the case then that would mean the government will pursue selective interventions to the tax brackets of the ENFIA in order to limit the burden to working class owners. However the latter scenario is seen as unlikely.

# The government narrative of a clean exit from the bailout program in August has received a boost from the President of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti who said in Athens on Friday that he believes the goal is “possible.” Speaking to local media, he gave his backing to the clean exit narrative because Greece is “recovering, reformed and has strong surpluses.” In its 2.5 year presence in Greece, the EBRD has so far financed investment in 31 projects in the private sector to the tune of EUR 1.6 billion. Greece, he said, is the fifth largest market for the EBRD out of 37. The bank’s mandate ends in 2020 and Chakrabatri said that, after a request from Athens, he will recommend an extension to 2025 to the board this month to help boost the Greek recovery. This year, he said, Greece can expect EUR 400 to 600 millions of investment financing.

# A war of words erupted yesterday between Athens and Ankara after Recep Tayyip Erdogan linked the fate of the two Greek soldiers that are being held in Turkey with that of the eight Turkish servicemen that he wants extradited from Greece. Erdogan lashed out at Greece and the EU for demanding the return of the soldiers while Ankara, he said, is still waiting for the extradition of the servicemen who fled to Greece after the botched coup attempt in Turkey in 2016. Greek courts have rejected the request. Erdogan said that the fate of the two Greek soldiers will be, likewise, decided by the Turkish justice system. “I’m very sorry but we also have rule of law. Whatever justice decides,” he said. He also accused Greek PM Alexis Tsipras of going back on his promise to extradite the Turkish servicemen. The Greek PM’s office responded late last night accusing Erdogan of “incomprehensibly (going down) a slippery road of provocative attacks by conflating two completely dissimilar cases.” Greece, the statement read, is a country of laws and has a PM that knows the procedures of the Greek judiciary “not a Sultan that makes promises on its behalf.” In an interview published in Proto Thema Sunday paper, the leader the EPP’s Parliamentary Group Manfred Weber described the two Greek soldiers as “political prisoners”.

# Meanwhile Greek Foreign Minister Nikos Kotzias is set to brief political party leaders today and tomorrow on the progress of his negotiations with his counterpart from the Former Yugoslav Republic of Macedonia with regard to the name dispute. Talks will resume after Greek Easter. Although both Kotzias and Nikola Dimitrov said last week they made progress, sticking points remain such as the demand by Athens for Skopje to change parts of its constitution that are deemed irredentist, as well as references to a ‘Macedonian“ nation and language which Greece does not recognize.
In a separate development yesterday, Athens and Washington were reportedly very close to signing a USD 1.2 billion deal for the US to upgrade 85 Greek F-16 fighter jets. The deal would have to be approved by Council on Foreign Policy and Defense (KYSEA) and Parliament.

# The water supply in Thessaloniki, the second largest Greek city, was slowly being restored yesterday after large parts of the northern port city went without for five days due to damage to an old pipeline. The water cut affected hundreds of thousands of people in a wider region of 1.1 million since last Tuesday, prompting criticism of the government by opposition parties for allegedly not doing enough to preempt the damage to the bursted pipeline which is 40-years-old. New Democracy leader Kyriakos Mitsotakis slammed Prime Minister Alexis Tsipras yesterday for not sacking Infrastructure Minister Christos Spirtzis and the administration of the state-run Thessaloniki Water Supply and Sewage Company (EYATH). “This just shows the level of indifference and cynicism and incompetence of this government,” he tweeted. The government hit back saying New Democracy should be the last to complain as it had done nothing to maintain the pipeline over the decades when the conservatives were in power.

On our Radar: Anarchists go on another vandalism rampage
After targeting the Israeli embassy last week, members of anti-establishment groups continued their spree of vandalism on Friday and Saturday with attacks against the Athens Court of First Instance and a notary office in the city centre. More specifically, shortly after Saturday midnight some 20 hooded people attacked the court smashing windows and causing damage to its front entrance. A day earlier unknown assailants smashed windows at a building in Athens housing a notary office and set a small fire, while on Thursday evening members of the Rouvikonas group threw flyers and shouted pro-Palestinian slogans outside the Israeli Ambassador’s residence. No arrests in any of the above incidents were reported. Anti-establishment groups have increased their attacks in recent months against state offices, financial agencies, embassies, media and other businesses