Athens Digest 30.11.2018

• Greece needs dialogue with its creditors before going off-script, says Dombrovskis

• Moody’s backs central bank’s bad-loan playbook

• Posting profits, Alpha and National Bank improve in Q3

• Budget 2019 disappoints Greek business

# Valdis Dombrovskis, the EU Commission vice-president, praised Greece’s commitment to post-bailout targets but stressed a series of financial relief measures planned by the Tsipras government should only be implemented after consultation with creditors. “We see that things are on track. Greece is planning to meet its primary surplus target of 3.5 percent of GDP. There is a certain fiscal space which Greece is intending to use among other things without implementing prelegislated pension cuts” he told the European Parliament’s Economic and Monetary Affairs Committee. “There needs to be a dialogue with creditors to ensure that this is a cooperative approach, because Greece’s continued adherence to the post-programme fiscal targets and structural reforms is a precondition also for debt measures.” (video here, scroll to 08:50:00)

# On Monday, the Eurogroup is due to consider Greece’s enhanced surveillance report with the focus expected to be on 2019 spending plans, an effort in Athens to overhaul property protection rules, and court decisions cancelling bailout-era fiscal measures.

# Moody’s has praised the Bank of Greece’s plan to reduce soured loans at the country’s banks. The rating agency said it viewed the BoG plan as credit positive, adding that all four major banks would benefit from the proposed creation of a disposal fund to address the huge volume of non-performing and troubled loans.

# Greece’s National Bank and Alpha Bank have both recovered from second-quarter losses, reporting July-to-September profits. NBG reported a net profit from continued operations of EUR 17 million, rebounding from a 15 million loss in the previous quarter. Alpha reported a net profit from continuing operations of EUR 41.1 million after a 52.9 million net loss in the previous quarter.

# The Hellenic Federation of Enterprises, SEV, has criticized 2019 Budget, arguing that it fails to adequately provide growth-friendly measures after the end of the bailout. In a review posted on the federation website, it noted that the government has decided to spread out its reduction of business taxes over four years (lowering the rate from 29 percent to 25 percent in 2022) _ a decision it said that would push improved consumer spending levels towards imported goods, and stifle a real recovery.

On our Radar: Half a million more
September was another bad month for Greek taxpayers as 510,000 more slipped into arrears, taking the total to an astonishing 4.3 million people. According to official figures, EUR 1.42 billion of taxes due in September were not paid, pushing the total so far this year to EUR 7.84. Confiscation orders issued by the Independent Public Revenue Authority have now affected 1.15 million people.