Athens Digest 17.07.2018

• A Russia problem closer to home

• Greece mulls 10-year bond sale ahead of exit, says report

• Guts in the recovery engine? Industrialists still worried

• Snam dunk: EC backs DESFA acquisition

• Family doctor reform in trouble


# As the United States’ western allies are still reeling from remarks made by President Trump after yesterday’s meeting with Russia’s Vladimir Putin, Greece is grappling with a meddling scandal of its own. FYROM PM Zoran Zaev accused Greek-Russian businessmen of making cash payments to protest groups in his country to try and derail the name deal with Greece. The claim follows similar allegations in Greece that prompted the expulsion of two Russian diplomats last week. The latest accusations made by BuzzFeed, which first quoted Zaev, drew an angry response from Greek-Russian businessman Ivan Savvidis who was named in the story. In a statement, he described the claims as “extremely libelous” and said he would respond with legal action.

# The government is considering a 10-year bond issue, possibly within the next month, according to a report in the German financial daily Handelsblatt. The Greek cash buffer means the country has no pressing need to return to markets when the bailout ends. But the report says Greece is keen to capitalise on positive market sentiment and bolster the government narrative that the country is regaining control of public finances. As bond yields remain below 4 percent, Greece could follow the market re-entry tactics used by other programme countries.

# Greece still faces the threat of a weak recovery, according to a report by the Hellenic Federation of Enterprises, SEV. Its monthly bulletin on financial activity warned that Greece is exiting the bailout programme with visible signs of weakness, including limited credit rating upgrades, a stock market index still below 800 points, and reluctance at the ECB concerning waiver and QE prospects. Those factors, the report warned, combined with the sharp political polarisation ahead of the next general election could all have a sobering effect on growth.

# The European Commission has given its approval for Italian gas grid operator Snam SpA to acquire Greece’s DESFA. Yesterday’s ruling found no competition concerns because the companies “are not active in the same geographic area.” The bid for the controlling stake of the Greek natural gas grid operator had been seen by creditors as a test of Greece’s commitment to continued market reforms. The Snam-led bid beat out a consortium made up of Regasificadora del Noroeste SA, Reganosa Asset Investments, Transgaz SA, and the European Bank for Reconstruction and Development.

# Plans to create a nationwide family doctor network _ a pillar of ongoing Greek health care reform _ are falling badly behind target and may ultimately have to be scrapped, according to a warning by the Greek Association of General Practitioners. It said less than 5 percent of staffing for the new system had been completed in greater Athens.



On our Radar: Portuguese Playbook
With just 34 days before the end of the programme, Greece should take a closer look at fellow bailout survivor Portugal, according to an Athens-based think-tank. The Research and Policy Institute Dianeosis said Portugal has developed into a successful export economy by sticking to a set of principles that Greek political parties are still struggling with. They include: Political consensus for reforms, dramatically cutting red tape, diversifying products to avoid wage competition with China, building strong export associations, and finding ways to more efficiently absorb EU structural funds. Bom Resultado!