Athens Digest 26.06.2018

• Greece gets upgrade by Standard & Poor’s and Moody’s

• Debt debate planned in parliament; growth outlook weakens

• PM Tsipras to meet City investors, UK’s May and Corbyn

• Opposition leader Mitsotakis vows to block name deal if elected PM

• EU must deliver for ‘North Macedonia,’ says foreign minister

• Hydro boost for PPC profits


# Ratings agency Standard & Poor’s has upgraded Greece sovereign rating by one notch from B to B+ following last week’s deal with creditors but said the level of public and private debt in the country remains a concern. The new rating remains four notches below investment grade. Separately, Moody’s also praised the Greek debt deal, saying it will leave Athens with “very moderate refinancing needs” for a decade.

# Greece’s debt deal is due to be discussed in parliament, with a date to be set in the coming days, following a request by New Democracy. The debate was being planned at the European Commission lowered expectations for Greece’s long-term growth potential, bringing them closer to the IMF outlook. A report on programme compliance and Greek DSA said: “Long-term real GDP growth is projected to level off to 1 percent after 2022, when the output gap has closed also reflecting the effects of population ageing,” and added: “Greece’s debt-to-GDP ratio is expected to reach 188.6 percent in 2018, 169.9 percent in 2020, 136.6 percent in 2030 and 127 percent in 2060.”

# PM Alexis Tsipras is in London as part of a series of initiatives aimed at raising Greece’s business profile following last week’s landmark agreement with European bailout lenders. Tsipras is to meet UK Prime Minister Theresa May and Labour leader Jeremy Corbyn today. Travelling with Deputy Finance Minister George Chouliarakis and other government finance officials, the PM will also hold talks with City investors, and will speak tomorrow afternoon at the London Business School.

# Opposition leader Kyriakos Mitsotakis has vowed to block Greece’s name agreement with FYROM if his New Democracy party wins an election before the deal is fully ratified. “I didn’t negotiate the agreement, I don’t agree with many of its terms, and I won’t vote for it _ not now, and not if I ever need to ratify it,” he told Skai television. Mitsotakis said that has not been pressed by the EPP to accept the deal and added that he has informed Berlin about his intentions. In Thessaloniki, riot police used stun grenades and tear to break up protesters who tried to block a meeting organized by the governing Syriza party on the name issue.

# Using the name “North Macedonia” repeatedly, Greek Foreign Minister Nikos Kotzias said he has urged the European Commission to make good on its promise to the small Balkan nation to deepen ties with the EU towards eventual accession. “I’ve told my (EU) counterparts they can be as strict as they want. But we must not block that prospect,” Kotzias said in an interview with the European media platform Euractive. “(Since) the European Commission started and set a horizon this summer to launch formal negotiations with North Macedonia and Albania, we will have to deliver the promise we made.”

# Public Power Corporation posted first-quarter operational profitability (EBITDA) of EUR 147.2 million. The positive results were helped by a marked increase in hydro generation, up 54.5 percent in Jan-March on the year. Domestic electricity demand was down 4.5 percent following a mild winter.



On our Radar: 198 days of taxes
Average Greek employees will have to work 198 days of 2018 _ or nearly seven months _ to pay their taxes, according to a survey by the free-market think-tank, KEFIM. It said July 18 this year would mark “Tax Freedom Day” in Greece, the symbolic start of when salaries would start going into workers’ pockets and not to the state. In 2007, before the crisis started, the day fell on May 28. Even in 2014, when the country returned to primary surpluses, the Tax Freedom Day fell earlier (June 22) than this year.