Athens Digest 04.10.2018

• Banks hammered but recover some losses

• Piraeus Bank: Capital boost plans on track

• EU’s Cretu to visit new projects supported with EUR 1.3bn EU funds

• Reports: Red Cross in Greece suspended

# Greek banking shares came under heavy pressure on the Athens Stock Exchange. Shares sank by 8.78 percent as a sectoral average after recovering from even heavier losses earlier in the day. Government officials described the rout as an overblown response from markets to a report by Bloomberg, last week.

# In response to news reports, Piraeus Bank said it had undergone a “fundamental transformation” over the last year that included an EUR 5 billion reduction in non-performing exposures over 12 months. CEO Christos Megalou told Reuters that the bank “is executing a capital enhancement plan, as already communicated to the market since mid-2018.” And he added: “The bank is in a continuous dialogue with the supervisory authorities and monitors debt capital markets to identify the window of opportunity for the non-dilutive capital instrument issuance included in the plan.”

# Corina Cretu, the EU Commissioner for Regional Policy, is in Greece to visit major new infrastructure projects that have been supported with EUR 1.3 billion in EU funds. The projects include: The re-flooded Lake Karla, near the central city of Volos, restored after an ill-fated effort in the 1960s to drain the site for farming use; a high-speed rail link that will eventually trim the Athens-Thessaloniki travel time from more than 5 hours to 3 hours and 30 minutes; and a freight complex near Athens that will boost the transport of goods out of Piraeus. Cretu met with Prime Minister Tsipras in Athens before heading north.

# After UNICEF axed ties with its Greek National Committee in April, reports in Athens maintain that the Hellenic Red Cross organization could be facing a similar fate. A delegation from the International Committee of the Red Cross visited the Greek capital this week but was unable to resolve differences over a number of organisational issues and announced the suspension of the Hellenic branch from the International Red Cross.

On our Radar: OLAF’s twin Greek probe
The EU fraud agency OLAF is investigating the possible mismanagement of catering funds for refugees and migrants. The probe will concentrate on a EUR 52 million grant to the Ministry of Defence, according to a report in the EU affairs newspaper and news website New Europe. OLAF is also investigating a second Greek case: Three officials, including the Head of the EU Parliament Office in Greece, have been suspended after a routine audit revealed alleged irregularities.