Athens Digest 20.09.2018

• Numbers support narrative to avoid pension cuts, Tsakalotos tells Scholz in Berlin

• New poll gives Conservatives strong but narrowed lead

• Cash flow deficit widens in 2018

• No moving plans for Media Markt

# Finance Minister Euclid Tsakalotos and EU Commissioner Pierre Moscovici met with German Finance Minister Olaf Schotz at a European Socialist Party (PES) event in Berlin. Tsakalotos insisted that his government is increasingly confident its fiscal performance in the coming years will allow Greece to find alternatives to legislated pension cuts in 2019, claiming that they are not a structural reform as well. Structural and fiscal aspect of the measure will be discussed in the Eurogroup, in November. Greek Authorities need a strong narrative to avoid cuts as creditors have agreed to consider to any reasonable policy proposed by Athens but also avoid backtracking from implemented reforms and agreed commitments just weeks after the bailout exit.

# “We have explained our arguments to the institutions and we will present them at the highest political level. We believe reason will prevail,” Tsakalotos said in an interview with “newpost” website. “The pension cuts are not a structural measure. It doesn’t affect the viability of the pension system,” he added. Tsakalotos conceded that additional taxes heaped on the self-employed contained “distortions” that would be addressed. “You can’t pay taxes and social contributions up to 70 percent of your income,” he said.

# New Democracy has retained a strong lead over Syriza according to a new poll. The MRB poll for Star Television gave the conservatives an 8.8-point lead over Syriza (from 9.8-point in July), The results were: New Democracy 30.9 percent, Syriza 22.1, Movement for Change 6.5, Golden Dawn 6, Communist Party 5.9, Centrists’ Union 2.6, Independent Greeks 1.5, Potami 1, Undecided/No response 14.4.

# Greece’s central government cash flow has recorded a deficit of EUR 2.61 billion in the first eight months of the year, the Bank of Greece said, compared with a deficit of EUR 1.49 billion for that period in 2017. The January-August ordinary budget revenue amounted to EUR 30.79 billion (compared to EUR 29.04 billion). Ordinary budget expenditure, including EUR 2.02 billion used for arrears payments, came in at EUR 33.83 billion (from EUR 32.81 billion).

# Consumer electronics giant Media Markt says it has no plans to pull out of the Greek market, publicly denying reports that it had been mulling a withdrawal. The reports said that the Greek division has required repeated financial support from the parent company. In a statement, Media Markt described Greece as an “important market” for the firm.

On our Radar: Pessimism and Recovery
Residents of Greece remain among the most pessimistic in countries with advanced economies, a global study published by the Pew Research Center found, marking a decade since the start of the global financial crisis. Only 18 percent of Greeks believe that the country’s children will be better off than their parents when they grow up, while 69 percent believed they would be worse off. The average for the advanced economies, seeing an improvement, was 34 percent, and 42 percent in emerging economies. Also, 87 percent of Greeks believed conditions had worsened in the past 20 years, the highest level in the survey.