Athens Digest 23.11.2018

• Central bank details plan for bad-loan disposal fund

• Dombrovskis backs the idea of a vehicle to deal with bad-loan mountain

• Green light for Greek debt relief

• Polls give New Democracy shot at outright win

# The Bank of Greece detailed its long-awaited proposal to offload nearly half the volume of non-performing and problem loans into a state-supported fund that would be used to securitize loans worth some EUR 40 billion. According to central bank data, almost 48 percent of all loans were non-performing or troubled before Greece ended its third bailout. Under the proposed plan, the disposal fund combined with other ongoing initiatives would help reduce that level to below the 10 percent over three years.

# European Commission Vice President Valdis Dombrovskis backed the idea of creating a clearing fund to deal with Greek banks’ bad-loan mountain, but added that talks on the issue were still in the early stages. In an interview with the Greek financial daily Naftemporiki (video), he also stressed that the Eurogroup would have the final say on Greece’s budget changes at a December 3 meeting.

# The EFSF Board of Directors approved the implementation of a set of medium-term debt relief measures for Greece, agreed in June’s Eurogroup meeting. “We estimate that the total package of medium-term measures agreed by ministers last June should lead to a cumulative reduction of Greece’s debt-to-GDP ratio of around 30 percentage points until 2060,” the ESM’s Klaus Regling said. He noted that conditions remain attached to some of the measures activated yesterday to ensure continued compliance.

# Reportedly, the board members (EWG) also stressed the need for Greece to comply with all its post-bailout commitments. The first enhanced surveillance report will be discussed during the Eurogroup meeting on December 3. In the coming days Greek Authorities have to agree with the country’s lenders on critical issues including the new first residence protection framework.

# New opinion polls suggested Kyriakos Mitsotakis’ New Democracy party has stabilized its lead over Syriza and increased its chances of outright election victory. A ‘Public Issue’ survey gave New Democracy a 16.5-point lead, a one-point improvement from July. The poll’s ‘voter influence’ measure gave the conservatives more than 150 seats in the 300-member parliament, again improving its position since mid-summer. The findings were: ND 38.5 percent, Syriza 22 percent, Movement for Change 9.5, KKE 7.5, Golden Dawn 7, with Potami and the Independent Greeks falling below the 3 percent threshold. A second survey for Skai television by ‘Pulse’, gave New Democracy a 9-point lead.

On our Radar: Being your own (broke) boss
Self-employed Greeks say the biggest problem they faced in 2017 was financial distress, according to data published by the National Statistics Agency Elstat. Some 60 percent of the self-employed survey respondents said that at some point during the year they were unable to meet their basic expenses. Further: 42.7 percent said they had no income at times of illness and 36.5 percent had spells without having any work. Also, 45.1 percent of respondents said they had difficulties making payment collections.