Athens Digest 05.07.2018

• Centeno dampens expectations over pension cuts

• Greece has the capacity to finance itself, MinFin Tsakalotos tells Reuters

• Government willing to discuss enhanced majority vote for Macedonia name deal

• EY survey: Corruption in Greece remains an issue for business executives

# After Commissioner Pierre Moscovici hinted in Athens on Tuesday that there could be some flexibility with regard to pension cuts in 2019, Eurogroup President Mario Centeno told Naftemboriki newspaper yesterday that back tracking is not an option. “I expect Greece not to deviate from previous commitments and, at the same time, to use the scope of policy options that arise from the program exit in a smart and responsible way. Going back is not really an option,” he said. His remarks also came after suggestions by government officials following the Eurogroup deal on June 21, that labor collective bargaining agreements could be restored and the minimum wage would be raised. Speaking to European Parliament yesterday, Centeno said Greece is ready to stand on its own feet again but added that it “should continue implementing responsible fiscal policies and growth-enhancing reforms.” “This is what Greece’s post-program framework will be about.” he said

# MinFin Tsakalotos told Reuters that Greece has the capacity to finance itself unaided under a debt relief deal linked to its exit from an international bailout, but the agreement’s long-term fiscal targets may need reviewing. The deal that euro zone finance ministers agreed in June to smooth next month’s exit from its third bailout offered clarity and reassurance to investors in Greece. That applied “whether we are talking about a 10-year government bond or whether we talk about foreign direct investment,” Tsakalotos said.

# The government said yesterday it is willing to discuss the demand made by junior coalition partner leader Panos Kammenos that the Macedonia name deal signed by Athens and Skopje should be ratified by an enhanced majority in Parliament. Government Spokesman Dimitris Tzanakopoulos said that even though the Greek Constitution doesn’t stipulate the need for a vote of 180 lawmakers, “Mr Kammenos’s proposal, which is a political proposal, will be the subject of discussion and consultation within the government when the time comes to make the necessary political decisions.”

# Almost half of 2,550 business executives from 55 countries surveyed by E&Y said that corruption in Greece remains an issue. More specifically, according to the 15th ΕΥ, Global Fraud Survey 46 percent of executives said there is corruption in Greece, compared to 21 percent who noted corruption in Western Europe in average. Greece has nonetheless improved since last year when another E&Y survey showed that 81 percent said there is corruption in the country.

On Our Radar: Electronic payments boosting VAT revenue
VAT revenues have been boosted by the large increase in electronic payments after the imposition in 2015 of capital controls, according to the director of the Foundation for Economic and Industrial Research (IOBE) Nikos Vettas. More specifically, he said that electronic payments have had a positive impact on tax compliance, and are responsible for at least to 50 percent of the annual increase in VAT revenue recorded in 2017. He said, however, that electronic payments in Greece remain below the EU average. Meeting the target of the EU average could increase VAT revenue by EUR3.3bn yearly which is more than the revenue of ENFIA, the unpopular property tax.