Athens Digest 19.12.2018

• Budget passes ahead of fresh inspection

• Conservatives take up competition post with EU Commission

• Ex-revenue chief Harry Theoharis joins New Democracy

• Lights out at historic steelmaker


# Lawmakers have approved the Commission-backed 2019 Greek budget that will extend high bailout-era taxes to secure the required primary surplus targets of at least 3.5 percent. Despite market warnings of more sluggish growth than expected, the budget forecasts a pickup in GDP from a 2.1 percent gain this year to 2.5 percent growth in 2019. Creditor-institution inspectors are expected to return to Athens in late January with a reform checklist that would allow for the release of ECB profit returns from Greek bonds, totalling some EUR 6.4 billion, if Athens is found to be in compliance. The budget was passed by 154-143 votes. Prime Minister Alexis Tsipras said it signalled the launch of Greece’s “modern renaissance.”

# Greece’s conservative opposition has sent a written complaint to the European Commission, citing plans by the government to back former caretaker prime minister Vassiliki Thanou as the next head of the country’s competition commission. New Democracy leader Kyriakos Mitsotakis wrote to EU Competition Commissioner Margrethe Vestager, arguing that placing Thanou in the post would set back efforts to reduce party political influence in Greece’s public administration _ an effort strongly endorsed by Greece’s bailout creditors. Thanou, 68, is a former Supreme Court president and was the government’s pick for caretaker prime minister before Tsipras’ re-election in 2015. She later served as a legal adviser to his government.

# In his book about the Eurocrisis, Jeroen Dijsselbloem described him as a “hero” for tackling the mountain of problems in Greece’s tax administration in the middle of its financial crisis. Harry Theoharis, the former Greek revenue chief and an outspoken critic of the government’s short-lived rebellion against creditors, has joined New Democracy. Theoharis was elected with the centrist Potami party but split with its leadership and became an independent MP in 2016. In a statement yesterday, he said that consensus was required among Greece’s “liberal, pro-European, and pro-reform” forces ahead of the next general election.

# Historic Greek steelmaker Halivourgiki was sent into freefall last night after its power supply was cut off amid mounting debts and unpaid bills. The disconnection was ordered after the company failed to raise money to cover the EUR 31.8 million owed in electricity payments and the latest warning period expired. A company offer to pay EUR 500,000 to keep the lights on was rejected by the Public Power Corporation. Troubled nickel producer Larco is also facing the threat of disconnection and closure due to unpaid electricity bills.



On our Radar: Industry group warns of unsteady recovery
Greek industry federation SEV is urging the government to adopt urgent pro-business reforms, expressing concern that imbalances in investment and economic sentiment could ultimately choke the country’s recovery. In its monthly review, SEV echoed concern voiced a day earlier by Bank of Greece Governor Yannis Stournaras who stressed that more reforms were needed to safeguard the Greek recovery.