Athens Digest 04.05.2018

• Germany wants Greek debt relief to be conditional, says MinFin Tsakalotos

• Bad timing to ask for non-implementation of pension cuts in 2019, he adds

• PM Tsipras greeted with protests during Lesvos visit

• Greece is a key partner for US energy agenda says US Ambassador


# Finance Minister Euclid Tsakalotos said to the government-affiliated “Sto Kokkino” radio that German German Finance Minister Olaf Scholz wants Greek debt relief to be conditional which, he added, contravenes the relevant Eurogroup decision and is something the IMF doesn’t want. “Most likely, what we will get (for debt relief) will turn Greece from a heavily indebted country into an indebted country” he claimed. He reiterated that Greece’s post-bailout surveillance will be “slightly increased” compared to Portugal’s but that will entail visits to Greece and not reviews by the institutions “ticking off” prior actions. Referring to Greece’s over performance in meeting fiscal targets, he said that the IMF is losing credibility over its off-the-mark forecasts, but could help Greece on debt relief. “It could also not join the program, he warned, if Greece doesn’t get enough debt relief.”.

# With regard to pension cuts that Greece must make on January 1 as part of the country’s bailout commitments, Tsakalotos said that Greece will not ask for their non-implementation. Now is not the time to discuss the matter, he said, as the government is strictly focussed on completing the country’s final bailout program.

# Prime Minister Alexis Tsipras was greeted with protests on Lesvos over the migration policy which has left thousands of asylum seekers stranded in camps on the islands of the eastern Aegean. Tsipras, who arrived on Lesvos to address a Regional Development Conference, admitted that “mistakes have been made and there are [infrastructure] shortages.” Strikes over migration policy and the planned imposition on July 1 of higher VAT rates on the islands brought Lesvos to a grinding halt yesterday.

# A liberalized Greek energy market could serve as an important partner for the implementation of the US energy agenda, US Ambassador to Greece Geoffrey Pyatt said at an energy conference in Athens. He stressed that US LNG imports, enabled following completion of a planned FSRU in Alexandroupolis, northern Greece, will contribute to supply diversification both in Greece and the EU. Having Greece as an entry point for US LNG towards the Balkans and Central and Eastern Europe through the materialization of the so-called Vertical Gas Corridor would facilitate the country’s emergence as a regional energy hub, a prospect also highlighted by the US ambassador. Finally, The Ambassador referred to the repetitive use of the supply cuts weapon by Russia for political lever, opposing to Nord Stream 2 and Turkish Stream pipeline projects.

# In his speech, EC Deputy Director-General in the DG Energy Gerasimos Thomas underlined that Greece should consistently continue to open up its electricity market without omitting to secure the viability of Public Power Corporation, in order to gain from healthy competition.



On our Radar: Agriculture Minister says CAP budget must not be reduced
Agriculture Minister Vangelis Apostolou told the Economist Agricultural Business Summit in the central Greek city of Larisa that the budget of the EU’s Common Agricultural Policy must not be reduced. He made his remarks a day after the EC proposed cutting funding for the CAP to the tune of 5 percent. Apart from calls against a budget cut, Apostolou also said that the prospect that national resources will be used to co-finance direct payments must not be considered.
For his part, the EC Director. Strategy, Simplification and Policy Analysis, DG AGRI, Tasos Haniotis said that biggest challenge for Greece is how resources are used in the post-2020 era. He noted that the new pricing environment, trade rules –stipulating that bilateral deals take precedence over the WTO – and the Paris climate agreement are changes that will define the agriculture and food sector in coming years.