Athens Digest 30.05.2018

• Italy crisis won’t change Greek exit strategy, unless…

• MinFim Tsakalotos: Cash buffer enough to protect Greece

• Last bailout bill to be debated as emergency legislation

• Piraeus Bank agrees sale of corporate NPE portfolio equivalent

• Enterprise Federation’s Fessas re-elected chairman

# Greece’s bailout exit plans will not be derailed by Italy’s political crisis and resulting market turmoil the government insisted last night_ barring a major upheaval. In parliament and on television, officials stressed that Athens would not be seeking a precautionary credit line or any change to its agreements with creditors despite the market uncertainty. “We have not been taken by surprise with these developments,” said Yannis Dragasakis, the deputy prime minister. “We have various means at our disposal to address issues like these.” But he added: “Of course, if the (situation) continues and intensifies, that will test the defences of each EU member, and common solutions to shield them will be looked at.”

# Finance Minister Euclid Tsakalotos says Greece’s cash buffers would be enough to protect the country from the Italian crisis. “Things are a bit more difficult because of Italy. But the Eurogroup decision taken in June 2017 to create a cash backup was done for that reason,” the minister told local radio in Greece’s western Preveza region. “So whenever the conditions are challenging, we will have access to money and we will not have to go to markets when interest rates are high.” The Athens Stock Exchange yesterday followed a sell-off across Europe, while Greek government bond yields spiked upwards.

# Television viewers planning to skip the opening match of World Cup 2018 might opt for a bit of bailout history: The last major package of legislation after eight grueling years of rescue programmes is to be debated in parliament on June 14. Speaker Nikos Voutsis said the omnibus bill to approve the Greek Medium-Term Fiscal Strategy and dozens of pending prior actions needed to complete the fourth bailout review will be debated as emergency legislation. Approval of the bill _ sought amid a coalition split on the Macedonia issue _ would give Greece a week until the June 21 Eurogroup to finalize negotiations on debt relief and post-bailout surveillance … and 67 days till the end of the programme.

# Piraeus Bank announced that it has entered into an agreement with Bain Capital Credit LP in relation to the sale of non-performing and denounced corporate credit exposures, secured with real estate collateral, equivalent to EUR1,950mn total legal claims or EUR1,450mn on-balance sheet gross book value. The Transaction is expected to generate circa 20 basis points of CET-1 capital, as at 31st March 2018, while reducing the NPE ratio of the Bank by more than 100 basis points. “The Transaction underlines our strong determination to continue de-risking our balance sheet and implementing our capital enhancing plan, in-line with our strategic initiative, Agenda 2020,” Christos Megalou, the Group’s CEO, said.

# Theodore Fessas has been re-elected chairman of the Hellenic Federation of Enterprises (SEV) through 2020. Fessas, founder and chairman of Greece’s Quest Holdings technology and e-commerce group, has led SEV since 2014 and told a general assembly meeting that the federation had exerted a stabilizing influence during the financial crisis. Prime Minister Tsipras and conservative opposition leader Kyriakos Mitsotakis spoke at the GA, following Fessas’ re-election. In his speech, the prime minister renewed a pledge to hold the next election at the end of the four-year term, in September, 2019.

On our Radar: Looking for offsets
Pensioners’ associations are planning to join protest marches in Athens today during a general strike against austerity, with planned cuts worth 1 percent of GDP now just six months away. Mounting opposition to the cuts has prompted the government to look for offsets that could ease pressure from the opposition. It has been widely reported that the government is considering another one-off payment, in the form of a Christmas bonus to pensioners. Government spokesman Dimitris Tzanakopoulos did not comment on the report directly, but told state TV: “Commitments for high primary surpluses will be respected, but in that context, we can estimate that in 2018, 2019, and 2020 there will be sufficient fiscal space to allow for measures that will aid Greek society.”