Athens Digest 12.12.2018

• Debate on pensions descends into ugly general elections campaign warm up

• Commission never considered extra pension cuts needed, Moscovici says

• A buy up of IMF and ECB loans is likely, says MinFin

• Land seizures add to Greece-Albania strain


# As a rule, leadership-level debates in parliament are sprinkled with one-liners aimed at the evening news. Prime Minister Tsipras’ latest confrontation with opposition leader Kyriakos Mitsotakis occurred during a debate on draft legislation to cancel 2019 pension cuts. Mitsotakis accused the Tsipras government of making concessions in a national issue (Prespa agreement) to gain favour on avoiding pension cuts. Tsipras countered that the conservatives had backed harsh austerity measures before the bailout ended in a failed effort turn more suffering Greek voters against the government. The unusually long exchange was clearly a warm up for general elections campaigns.

# With polls approaching, Tsipras’ coalition partner, right-wing Defence Minister Panos Kammenos, restated that he could not remain in the government coalition if the Macedonia deal came to parliament for ratification. “We do not agree with the use of the term ‘Macedonia’ _ and if the (agreement) comes to (parliament) and we have to part ways, we will,” Kammenos said. Nevertheless, reportedly, his party will not support a motion of censure against the government.

# “It is very good news that this threat to the incomes of many hundreds of thousands of struggling households has now been lifted,” said Commissioner Moscovici after the Greek Parliament vote not to proceed with pre-legislated pension cuts. The Commissioner highlighted that pension cuts would have reduced around 1.4 million pensioners’ incomes by a further 14 percent on average. “The Commission has never considered that these extra cuts were needed either to ensure the long-term sustainability of the pension system or to reach next year’s primary surplus target,” he added.

# Euclid Tsakalotos says the government is finalizing plans to replace property protection rules with new measures designed to expose so-called strategic defaulters. Current provisions expire at the end of the month, leaving mortgage holders who are behind on payments at potential risk. Speaking to reporters in New York, Tsakalotos also said that a buy up of more expensive IMF and ECB loans is now seen as likely, moving them to the ESM basket. Greece’s central challenge post-bailout, Tsakalotos said, was to build a “simple, stable, and fair” tax system.



On our Radar: Land seizures add to Greece-Albania strain
The Greek foreign ministry expressed “deep concern” over a planned land acquisition programme by the Albanian government for tourism development which it said would involve the loss of private property belonging to Greeks in the south of the country. It described the plan as a flagrant violation of human rights. “Such actions are not consistent with the declared European aspirations of Albania and are contrary to its relevant obligations,” the announcement says.