Athens Digest 05.06.2018

• IMF (non) participation won’t affect exit, says government spokesperson

• Italy crisis signals need for cautious exit, says Bank of Greece Governor Stournaras while PM Tsipras promises fiscal future without ‘crutches’

• Growth streak extended to five quarters

• New Democracy maintains strong lead over ruling Syriza, new poll says

• Anarchists attack Development Ministry over gunman’s hunger strike

# Greece is playing down IMF participation in the programme after the fund’s managing director Christine Lagarde and European creditors failed to break the deadlock on Greek debt relief. Dimitris Tzanakopoulos, the Greek government spokesman, argued IMF participation with a loan contribution was not key to a solution. “What is important is whether the change in Greece’s debt profile will limit financing needs to no more than 15 percent of GDP,” he said. Senior European finance officials are set to hold follow-up talks in Paris on Thursday.

# Bank of Greece Governor Yannis Stournaras says volatility in bond markets seen during the political crisis in Italy has strengthened his conviction that Greece should ask lenders for a precautionary credit line. He told Japan’s Nikkei newspaper that the cash-buffer option favoured by the government would be helpful. But he added: “The two tools (cash buffer, precautionary credit line) should not be considered as mutually exclusive, but as complements.” In sharp contrast to Stournaras’ remarks, the prime minister last night insisted that his government was determined to take Greece off “life support” in August and leave the bailout “without crutches.”

# The Greek economy has grown for a fifth consecutive quarter despite signs of faltering consumer confidence. Statistical authority Elstat said the economy grew by 2.3 percent on the year in January-March and by 0.8 percent from the previous quarter. Monthly figures from the Foundation for Economic and Industrial Research, IOBE, were less encouraging. Its economic sentiment index in May saw a marginal improvement at 104.2 from 103.6 the previous month due to flat consumer confidence and uncertainty over bailout negotiations.

# A survey for the pro-government “Efimerida Syntakton” newspaper by ‘Prorata’ found that the Syriza ruling party was 8 points behind New Democracy in “electoral sentiment” at 34 to 26 percent. They were followed by: Movement for Change at 14 percent, Greek Communist Party (KKE) at 13 percent, and Golden Dawn at 9 percent.

# Members of anarchist groups have attacked the Development Ministry building in central Athens, raising the intensity of a political confrontation on law-and-order issues. The attackers damaged the inside of the building, in solidarity with jailed terrorist gunman Dimitris Koufodinas who started a hunger strike last week after his biannual prison leave was canceled. Koufodinas is serving life for participating in 11 of the 23 killings carried out by the armed far-left group November 17.

On our Radar: 30+1 proposals for Greece within the EU framework
A group of Greek academics and experts, under the auspices of Dianeosis think tank, has issued of suggested priorities for the Greek government to pursue within the EU framework as part of reforms being debated ahead of next year’s European Parliament elections. Proposals include public investment safeguards for member states in recession, an EU-wide benefit scheme for unemployment blackspots, faster integration of energy networks across the bloc, and targeted aid for specific groups of farmers. The study led by George Pagoulatos, Professor of European Politics and Economy at Athens University of Economics and Business is signed by Prof. Spyros Blavoukos, ELIAMEP’s (Hellenic Foundation of European & Foreign Policy) General Director Thanos Dokos, Dr. Dimitra Tsiggou and the Head of Athens Digest John Papageorgiou. It was conducted after more than 80 interviews with senior Greek and European officials and will be presented in Brussels in September. You may find the Greek version here.