Athens Digest 12.10.2018

• Moscovici on Greek pensions: “Creditors are human beings”

• MinFin Tsakalotos to meet Lagarde, Thomsen

• Despite reforms, public services too costly in taxes, the Hellenic Federation of Enterprises warns

• Greek president told WWII reparation claims “legally active”


# If budget targets are met, creditors could accept Greek government plans to abandon pension cuts in 2019, Pierre Moscovici said in an interview. The EU Commissioner told Bloomberg television that the Eurogroup’s decision will be depended on Greece’s ability to deliver a primary surplus above the required 3.5 percent. “My sense is that creditors cannot ask too much from the Greek people … who suffered so much during the crisis,” he said. “The creditors are human beings, The creditors are not machines … So if Greece comes with a credible plan … then it can be considered.”

# Finance Minister Euclid Tsakalotos will hold meetings today with IMF with Managing Director Christine Lagarde and European Department Director Poul Thomsen and is reportedly expected to discuss pension reform as well as a plan for early repayment of bailout loans to the Fund. The move would save Greece money in debt servicing costs as IMF loans are more costly than those received from European creditors. The meetings will be held on the sidelines of the annual IMF and World Bank meetings in Bali, Indonesia.

# Greeks are still paying high taxes for relatively poor quality public services despite years of bailout-era reforms, the Hellenic Federation of Enterprises has warned. In its weekly bulletin, the federation said Greece pays top-tier tax levels similar to Scandinavian countries, France and Belgium. In 2017, tax revenues were at 27.5 percent of GDP (compared to the EU average of 26.5 percent), and social security revenues were 14.6 percent (EU average 13.3 percent). The federation urged continued reforms to improve tax collection and spending efficiency, and warned that current policies could create an “unsustainable relationship” between the state and citizens over the economy.

# Greece has relaunched a bid to claim WWII reparations from Germany during a visit by the country’s President Frank-Walter Steinmeier. At an official dinner held in his honour last night, Greek President Prokopis Pavlopoulos described the claims as “legally active and judicially enforceable” _ referring the claims that a special Greek parliamentary committee says are worth more than EUR 270 billion. Steinmeier made no reference to the reparations. He apologized for the “horrors” of the Nazi occupation in Greece and visited a former concentration camp outside Athens.



On our Radar: Church Trouble
A major dispute within the Orthodox Church over Ukraine has added pressure on the church in Greece. Last night, the Istanbul-based Ecumenical Patriarch Bartholomew recognized the independence of the Ukrainian Orthodox Church. Russia’s Church called the action move “catastrophic.” Russian Orthodox Patriarch Kirill had asked Greek Church leader Archbishop Ieronymos to intervene. But ties between Athens and Istanbul are under strain over separate disputes.