Athens Digest 03.09.2018

• PM Tsipras to announce handouts with pension cuts on his mind

• Bundesbank chief urges Greece to stick to reforms

• G.Pyatt (US Ambassador to Athens): We have common regional interests

• Greek banks announce progress in their Q2 results

• Digital platform registering home sharers activated

# Seeking to push the narrative that a new era has dawned, PM Alexis Tsipras intends to follow up last week’s cabinet reshuffle with an announcement of handouts and tax cuts on Saturday at the Thessaloniki International Fair. The non-implementation of pension cuts in January remains the government’s main objective and the issue is expected to be discussed during the visit next Monday to Athens by the institutions. However, it will not be raised at Friday’s Eurogroup as it would be “premature,” according to a Eurozone official – quoted by Greek media on Friday – who said Greece must implement agreed reforms.

# Nonetheless, deputy PM Yiannis Dragasakis said “we will do everything we can so that pensions are not cut.” Media reports have suggested that Greece may request that pension reform is gradually enforced, not scrapped. The first post-bailout report by the institutions is expected in early October at the latest and its approval by the EG at the end of the same month or early November.

# Meanwhile, German Bundesbank President Jens Weidmann who was in Athens last week at the invitation of the Hellenic Bank Association (EET) urged Greece to remain on the path of reforms, saying that citizens have yet to feel the benefits of recovery. “(The) end of the third adjustment programme is not the finishing line, but a milestone on a long road to recovery,” he said at event by hosted by EET in Athens. During his stay, Weidmann met with Dragasakis and with ND leader Kyriakos Mitsotakis – but not with the PM.

# The US and Greece share common interests in Western Balkans and Eastern Mediterranean, says the American ambassador to Athens, Geoffrey Pyatt, in an interview published in Kathimerini newspaper. “(Greece’s) agenda compliments very much our interests and our vision for the wider region whether in terms of the future of the Western Balkans or the importance of dealing with threats like terrorism, piracy, illegal migration in the Eastern Mediterranean or helping to ensure that your big neighbor to the east remains anchored in Europe and European institutions,” he said.

# Piraeus bank, the largest lender in Greece, announced its Q2 results last Friday. A further Cleaning-up and Strengthening of the Group’s Balance Sheet is monitored: Recurring Pre-Provision Income at EUR224m, +8 percent qoq, and EUR24m Net Profit from Continuing Operations. “Piraeus Bank continued its progress. Profitability is being restored gradually (…) We are also pleased to report that our covered bonds have now received an investment grade rating and will thus qualify as eligible ECB collateral (…) We have booked EUR3.5bn of provisions in the past 3 quarters including the IFRS9 FTA impact, we have accelerated the NPE reduction process with EUR4.4bn NPE decrease in the same period and we increased the NPE cash coverage ratio to 49 percent, up by 3ppts yoy” said Christos Megalou, CEO of Piraeus Bank.

# Greece’s others three systemic banks – Alpha Bank, Eurobank and NBG also posted improved results last week. Alpha Bank reported after-tax profits of EUR12.3m in the first half of 2018, while Eurobank recorded accumulated earnings in first six months of 2018 of EUR 112.6m. NBG recorded profits of EUR 21m in the first quarter and a H1 total of EUR 41m.

# The digital platform that allows landlords to declare the properties they are leasing, via Airbnb and HomeAway, was activated last Thursday by the Independent Authority for Public Revenue. The platform’s activation is part of a crackdown on tax evasion, allowing homeowners to declare the properties they are renting out and to whom.



On Our Radar: New minister accused of downplaying terrorism
New Democracy has accused the government of “downplaying” the threat posed by terrorism in response to remarks by the new Citizens Protection Minister Olga Gerovasili at the weekend. Speaking to the ‘Efsyn’ leftist newspaper in the wake of last Tuesday’s assault by the Rouvikonas anarchist group at the Greek foreign ministry, Gerovasili said that “the best way to deal with terrorism is to prevent its causes.” ND said her interview highlighted the “dangerous ideological obsessions” pervading Syriza. The government has been repeatedly accused of being weak and ineffective on matters of security and of turning a blind eye to lawlessness.