Athens Digest 09.11.2018

• PM Tsipras: 10,000 additional state jobs in 2019 and general elections in October

• Growth forecast edges downward

• Thomsen: Pension and tax reforms necessary to generate space for growth-boosting policies

• Weber says Greece needs better investment policy

# Prime Minister Alexis Tsipras says announcements for 10,000 additional public sector jobs will be made in 2019, and committed to holding a general election next October. In a live interview on Alpha television, Tsipras said the positions would be added following agreement with the Greek Orthodox Church to take priests off the direct state payroll (but still pay them through a state grant). Tsipras’ pledge followed a vote in parliament backing the return of EUR 820 million to several groups of civil servants who won legal action against bailout-era salary cuts.

# The European Commission expects Greece’s growth to be held at 2 percent in 2019 and 2020, but the outcome would be affected by ongoing budget negotiations. According to its Autumn Forecast, the primary surplus next year will be up to 3.9 percent of GDP (0.3 percentage points lower than the projection in the Greek draft budget). But the Commission adds: “Negotiations for the 2019 budget are ongoing, and it is expected that the final package of measures will lead to a primary surplus of 3.5 percent of GDP for 2019. In this event, real growth rates would be higher and could reach 2.3 percent of GDP in 2019-20, which is in line with earlier Commission forecasts.”

# The IMF’s Poul Thomsen said Greece should see through planned pension and tax reforms but stressed that the fund no longer has a lead role in the country’s financial decisions. During the presentation of the Regional Economic Outlook for Europe, Thomsen, who led the Greek programme for the Fund and is its European department director said money generated from outperforming primary surplus targets _ known as ‘fiscal space’ _ should be spent on growth-boosting programmes.

# Greece has fallen behind other bailed-out countries in attracting investment and needs a “fresh start” in public policy, the new conservative candidate in next year’s European election says. Manfred Weber, chosen this week to represent the European People’s Party, told the Greek financial website euro2day: “When you compare Greece with Portugal or other programme countries, then the investment conditions are not really good. I think there is a need for a fresh start _ a restart _ of the Greek policy.” He thanked Greek conservative leader Kyriakos Mitsotakis for backing his candidacy and said he supported greater European solidarity towards Mediterranean EU members in fighting illegal immigration.

On our Radar: Greece-Bulgaria pipeline passes EU test
Greece’s has welcomed European Commission approval of proposed funding arrangements for the Greece-Bulgaria Interconnector (IGB) gas pipeline, that would extend the network of Caspian Sea gas to Bulgaria. The Commission found that the venture did not violate state subsidy rules. IGB would transport gas from the Trans-Adriatic Pipeline (TAP) that is currently under construction, as well as gas from LNG terminals in northeastern Greece.