Athens Digest 11.07.2018

• Local admin reform points to May poll

• End of island VAT discounts in the end of the year

• Tsipras, Erdogan plan meeting on the sidelines of the NATO summit

• German officials in Greece for migration talks

• Green light for Crete airport

# A group MPs from the governing Syriza party have submitted a legislative amendment seeking parliamentary approval for the runoff round of the upcoming local government election to coincide with the date of the European Parliament vote next May. The move has raised speculation that the government could also call a general election on that date. The government must go to the polls by September 2019, and the prime minister has repeatedly pledged to serve a full term.

# Athens will keep remaining VAT discounts in specific islands until the end of the year, according to a European official. Lesvos, Chios and other islands off the Turkish coast which have refugee-and-migrant camps have been granted a six-month extension by the government before switching from a sale tax rate of 17 percent to 24 percent for most goods and services. The official, speaking in Brussels yesterday, also cautioned Greece on the possible use of flexibility in implementing planned pension cuts in 2019. The Commission’s Valdis Dombrovskis and Pierre Moscovici will today outline the proposal for Greece’s post-programme surveillance mechanism. Reportedly, it will be based on the June 21 Eurogroup statement as well as on the recent supplementary MoU by the institutions.

# PM Alexis Tsipras will meet Turkish President Recep Tayyip on the sidelines of the NATO summit. In Athens, government spokesman Dimitris Tzanakopoulos said Tsipras’ priority at the summit talks remained the release of two Greek border guards who have been held in Turkish prison custody for over four months. The meeting will take place tomorrow afternoon. At the summit, FYROM is expected to receive an invitation for become the 30th member of NATO, pending approval of its agreement with Greece to adopt the name North Macedonia.

# A delegation of German government officials is in Athens for talks on controversial proposals to send migrants back to Greece. Germany wants to send back several thousand asylum seekers registered in Greece and should have remained here. Athens is also pressing the German government to accept migrants who applied for family reunification before restrictions to the measure were imposed.

# News media reports in Greece say European Union competition authorities are set to approve plans to build a new airport on the island of Crete. In a EUR 480 deal, the Ariadne Airport Group, made up of Greece’s GEK Terna construction company and Indian airport operator GMR Airports, won the contract and 35-year concession for the new airport serving Heraklion that would replace the current Nikos Kazantzakis airport.

On our Radar: Government Vs Hellenic Federation of Enterprises
Some weeks ago, the president of the Hellenic Federation of Enterprises (SEV) praised PM for the end of the ‘MoUs era’. This doesn’t seem to be the case anymore. Yesterday, the government spokesperson Dimitris Tzanakopoulos accused the Greek business federation of taking sides in a political debate over labour reform, supporting conservatives. A day earlier, PM Tsipras had accused SEV leadership of intervening in the public debate on the 2019 and 2020 measures, giving a signal that they need to be implemented even if Greece meets its fiscal targets. SEV argues that a return to “rigid” employment practices could hurt the recovery. SEV president Theodoros Fessas yesterday maintained that the government’s positions on the issue _ depending on where they were expressed _ had not been consistent.