Athens Digest 03.12.2018

• After budget gets the green light, reforms discussions head into extra time

• Minimum wage rise could hurt employment, according to report

• Piraeus Bank takes step to restore profitability

# Greece will be on the agenda of today’s Eurogroup but its budget and the first enhanced surveillance report will not spark any intense discussion, according to a European official. The official also responded negatively when asked if Greek privatizations delays will be scrutinized, stressing that the progress of reforms will be assessed in February after the drafting of next surveillance report in early 2019. The report will assess whether Athens will be eligible to receive Greek state bond holding profits from eurozone central banks.

# A rise in the minimum wage in Greece would place pressure on employment, according to a report which is, allegedly, in the possession of Labour Minister Efi Achtsioglou. The findings in the report – drafted by experts of the finance and labour ministries, as well as the Centre of Planning and Economic Research (KEPE) institute- sharply contrast expectations of a minimum wage rise of 8 percent. Sources cited by the Greek media said that a compromise solution is now under discussion for a significantly lower increase. The compromise is backed by European creditors as indicated in the recent enhanced surveillance report on Greece.

# Piraeus Bank said it has made a significant step forward in restoring profitability after reporting pre-provision income of EUR 253mn and shareholder net profit of EUR 94mn in Q3. A EUR 5.2bn NPE reduction over the past year was also reported. “This performance has been achieved despite the turbulent European financial markets over the past few months,” the bank’s management said in a statement. “The Ministry of Finance/HFSF and the Bank of Greece have unveiled two proposals to further address Greek banks’ high NPEs. Although at a preliminary stage, both plans could contribute to a systemic solution to the NPE issue,” it added. Meanwhile, the bank has announced to analysts its decision not to pay the CoCos coupon for this year’s use, in order not to remove 36 points from the capital index as allowed by the law. However, it was stressed that the Bank would proceed as normal to pay the coupon in 2019.

On Our Radar: QCM set to announce bigger scandal than Folli Follie?
After exposing the business scandal of Greek jewelry maker Folli Follie last May, Gabriel Grego of Quintessential Capital Management is, reportedly, expected to unveil an even bigger one today at the Kase Learning Shorting Conference in New York. The conference organizer Whitney Tilson said the scam involves a company listed on NYSE with a multi-billion dollar market cap. According to Tilson, Grego will reveal a multi-million dollar scam at the expense of shareholders. In May, Folli Follie’s stock plummeted after QCM’s revelations.