Athens Digest 02.11.2019

• IMF says Greece should stick to pension cuts

• Labour Minister: Minimum wage rise remains a ‘core commitment’

• Central bank study suggests low rates, QE here to stay

• FT: Auditors probe potential $200m fraud at Aegean Marine


# The IMF has conceded that it no longer has a lead role in Greece’s financial stabilization but urged the country to stick with a controversial commitment to cut pensions in 2019. “On the pension reform … this is something that’s been agreed for some time and we think it’s important that Greece moves in a convincing way,” fund spokesman Gerry Rice told reporters at a briefing. “We do see the implementation of the 2019-2020 pre-legislated package as moving in this direction by freeing up fiscal space for non-retiree social spending which remains low and helping to reduce the tax burden.” (video here – time: 14.20)

# Despite concern among creditors, the government has renewed a promise to raise the minimum wage early in the new year. The issue remains sensitive one as likely to attract Eurogroup over worries that competitiveness may suffer with unemployment still at 19 percent. However, Effie Achtsioglou, the labour minister, said the minimum wage rise remains a “core commitment” of the Syriza-led government.

# Central banks are likely to continue to favour low interest rates and the use of quantitative easing, a Bank of Greece study suggests. The research was presented at a conference in Tirana, Albania by Bank of Greece chief economist Dimitris Malliaropoulos. “All in all, there is no strong case for a fundamental change in the monetary policy framework,” the bank said in a statement on the report. “Central banks are expected to continue to use the asset side of their balance sheets, as well as other tools such as forward guidance, in addition to their standard interest rate policies.”

# According to a Financial Times report, a probe by international auditors has been looking into whether there was a $200m fraud at Aegean Marine Petroleum Network, a NYSE listed company, involving fake transactions with brass-plate companies.



On our Radar: Israeli leader joins Balkan meeting
Prime Minister Tsipras is due in Varna, Bulgaria this morning for a meeting of several Balkan heads of government that will be joined by Israeli Prime Minister Benjamin Netanyahu. The leaders of Greece, Romania, Bulgaria, and Serbia have been holding regular meetings to discuss integrating transport and infrastructure across the region and supporting the ambitions of non-EU members in the Balkans to join the bloc. Before leaving Israel, Netanyahu said he hoped the talks would help counter what his government considers to be a hostile approach from the European Union.