Athens Digest 04.01.2019

• Bank deposits take November hit

• Mitsotakis joins Ireland’s Varadkar at CSU meetings

• Island mayors blast refugee-linked VAT policy

• Report: Moria’s forgotten suffering _ winter returns to plague overcrowded camps

# Commercial and household bank deposits dipped by EUR 90 million over two months to EUR 131.39 billion in November, ending an inflow run that lasted for most of 2018, with a generally positive course over the past years. The Bank of Greece data was released yesterday. Moreover, tax arrears to the state continue to rise. The amount of uncollected taxes rose by a further EUR 875 million in November, according to the Independent Authority for Public Revenue.

# Opposition leader Kyriakos Mitsotakis is attending annual meetings of the Christian Social Union at Seeon in southern Germany. Mitsotakis was invited along with Irish Prime Minister Leo Varadkar to attend the meetings, as the Bavarian ally of the conservative CDU strives to stem a growing challenge from the far-right AfD ahead of the the European elections in May. The CSU is reportedly seeking to reconnect with dissatisfied German voters and repair relations with conservative European allies, including Greece’s New Democracy party following years of strain during the bailout programmes.

# The mayors of Greek islands used to contain refugees and migrants have sharply criticized a government decision linking lower VAT rates to the refugee crisis. In a joint letter, the mayors of Chios, Lesvos, Samos, Leros, and Kos argued that the government should seek lower sales tax rates based on geographical criteria to assist remote populations, citing examples of special tax regimes for relatively isolated regions in other EU countries. The letter was written in response to a recent decision by the government extend lower VAT rates on the five islands for another six months, noting that migrant camps on those islands remained overcrowded. The lower VAT rates for different product and service categories are 5, 9 and 17 percent, compared to 6, 13, and 24 percent for the rest of the country.

# Despite recent efforts to reduce overcrowding at island refugee camps, winter has returned to find many camp dwellers in despair. The German daily Handelsblatt was the latest international news outlet to visit camp Moria on Lesvos, where new arrivals have little hope of getting a camp placement and are obliged to live in freezing and squalid tents outside the main facility. Greek authorities, the newspaper commented, appear to be unable to cope with the scale of the problem while the European Union appears unwilling to effectively address it.

On our Radar: Institution Crisis?
As Greeks await developments in the alleged Novartis bribery scandal, New Democracy has accused the government of undermining the rule of law after a member of the Cabinet publicly accused investigators of foot dragging. At the same time, the Association of Greek Judges and Prosecutors criticised the Cabinet member _ Deputy Health Minister Pavlos Polakis _ for “attempting to intervene in the work of the judiciary,” and undermining the separation of powers. A government official said that unlike many occasions in the past, people involved in financial scandals would no longer go unpunished.