Athens Digest 15.10.2018

• 2019 draft budget to be submitted today to EC

• Pension cuts: Greeks have a case, Dijsselbloem says

• Greece must to stick to agreements to survive international turmoil, says Stournaras

• Syriza united on Macedonia name deal, but divided over future of coalition

# The government will submit to European Commission today its draft budget for 2019 reportedly without including agreed pension cuts. In meetings with International Monetary Fund Managing Director Christine Lagarde and the Head of the IMF’s European department Poul Thomsen in Bali, Finance Minister Euclid Tsakalotos made the government’s case that cutting pensions is not a structural measure and that there is enough fiscal space to implement the majority of its countermeasures over a four-year period. According to an announcement by the Greek finance ministry, the IMF says that the issue of fiscal space is primarily a matter of concern for Greece and its European partners. The final decision will be taken at the Eurogroup after the evaluation of the Greek draft budget by the Commission and the first quarterly enhanced surveillance report by the institutions are issued.

# Meanwhile, former Eurogroup president Jeroen Dijsselbloem, said on his personal blog that Greece has a case not to proceed with pension cuts in January. “I think the Greeks have a case, pointing out that this measure has no structural impact on the pension system,” he claimed. The Dutch politician said that as things stand now, Greece will have fiscal space “this year and next.”
“When the Eurogroup discusses next steps for the Greek pension system, it may find there is scope for flexibility given the results in Greece so far. It may want to spend some more time on the pension systems of others, Germany for one,” he concluded.

# Citing the international volatility sparked by the Italian crisis and the US-China trade war, the governor of the Bank of Greece Yiannis Stournaras stressed yesterday that Greece must adhere to all the agreements signed with its lenders, as it is only the way it can emerge from its financial predicament and restore its credibility. Speaking to “Parapolitika” newspaper, Stournaras said Greece remains “fragile” and that it needs to be “shielded” so as not to be swept away by the international turbulence which has created a “less friendlier economic environment” than assumed.

# A two-day meeting of ruling Syriza’s central committee at the weekend showed that the Macedonia name deal will be unanimously backed by the party if it goes to Parliament for a vote. Despite the vehement opposition to the deal expressed by junior coalition partner the Independent Greeks (ANELl) and its leader Panos Kammenos, the party appeared confident nonetheless that it will be able to muster 151 votes for its ratification. Syriza however appeared divided over whether it should remain in coalition with ANEL, with many suggesting that Kammenos should be removed from his position in the government as defense minister.

On Our Radar: France’s Macron is most popular foreign leader in Greece
French President Emmanuel Macron is the most popular foreign leader in Greece, according to a survey by the Pulse polling company on behalf of the Kathimerini newspaper. The French leader was the preferred choice of 55-percent of respondents, ahead of European Commission President Jean-Claude Juncker with and Russian President Vladimir Putin with 43-percent. German Chancellor Angela Merkel (29-percent), US President Donald Trump (27-percent) were at the bottom end of the list. Turkish President Tayyip Erdogan was favored by just 5-percent . France was the country with the best attitude to Greece, according to 63-percent of respondents, followed by China (54-percent) and the US (49-percent)- despite Trump’s low popularity. Germany was at the lower end of the ranking with 24-percent, ahead of Turkey with just 4-percent.