Athens Digest 16.07.2018

• Expulsion of Russian diplomats: Athens say evidence of Russian meddling was more than enough

• Minister not ruling out suspension of pension cuts

• Polls shows steady ND lead, Syriza struggling to rally party base

# Minister of State Alekos Flambouraris dismissed claims that the US was behind Greece’s move to expel two Russian diplomats and bar entry to another two Russian nationals. “We exhausted all diplomatic means before the expulsion of the Russian diplomats,” he said yesterday. “There was no US intervention.” Athens claims Russians tried to bribe and influence clergymen, local officials and far right groups to oppose the Macedonia name deal that led to NATO’s invitation to FYROM to join the alliance. Russian Foreign Minister Sergey Lavrov told RT on Saturday that Greece was behaving like other western countries who accuse Russia with little or no evidence. “We are not given any single fact,” he said. However, according to a Financial Times report two Russian diplomats were active in the northern city of Alexandroupolis and that one bribery attempt failed when a Greek military officer reported the incident to his commander.

# Deputy Social Security Minister Tassos Petropoulos said yesterday that he is not ruling out a suspension of the planned pension cuts on January 1, 2019. Speaking to Imerisia newspaper, Petropoulos said that “we are taking care to prevent continuous reductions in pensions” which was the policy of previous governments. “In the state budget for 2019 the government will set development targets and weigh social needs,” he said. Eurogroup officials have consistently urged Athens not to roll back agreed reforms, which include pension cuts. Petropoulos also said the government plans to ease the contributions of self employed professionals in sectors hardest-hit by the crisis.

# However, Petropoulos’ remarks came as the government has reportedly made a decision about a six-month extension to pay arrears to new pensioners. The arrears had been scheduled to be paid in June.

# Opposition New Democracy holds an 8 point lead over ruling Syriza, according to a poll by Prorata on Saturday on behalf of the left wing ‘Efimerida Syntakton’ newspaper. More specifically the poll showed that ND would garner up to 35% (34% in June) as opposed to Syriza with up to 27% (26% in June). Moreover, 36 % of people that voted for Syriza in September 2015 said there was more than an 80% chance they would vote the same again. The corresponding figure for ND was 76%.

On Our Radar: Reforms are a one-way street, says Bruegel deputy director
Greece has no room for maneuvers in fiscal or monetary policy, according to Maria Demertzis, deputy director at the Bruegel European think tank. Speaking to Athens Municipal Radio, she said that given these restrictions, Greece must proceed with the necessary structural reforms and improve the quality of its institutions. “What is very important is the quality of country’s institutions,” she said, adding Greece institution are lacking in this regard. (In a recent study, Demertzis argued that improvement in institutional quality, particularly concerning the rule of law, is the most essential and urgent structural reform to be pursued)