Athens Digest 10.01.2019

• PM Tsipras promises confidence vote if coalition collapses

• Yield improves at T-bill auction

• Katainen says Greece top beneficiary of Juncker Fund

• Economic sentiment stuck, consumer confidence improved

# Crisis coalition talks have been postponed till tomorrow, after German Chancellor Angela Merkel completes her one-and-a-half-day visit to Athens. But Prime Minister Alexis Tsipras was keen to make news in a live interview for Open TV. The headlines: Tsipras will call a vote of confidence if Defence Minister Kammenos makes a full withdrawal and no longer supports the government; A minority government would trigger an early _ but not snap _ election; The government is confident it has the votes for the Macedonia deal to pass; The agreement will be submitted to parliament in January with NATO accession for FYROM to follow soon afterward; And the government will back President Prokopis Pavlopoulos for a second term. Kammenos, meanwhile, called off a meeting with his MPs after several were reportedly reluctant to attend.

# Greece has seen an interest-rate improvement at its latest T-bill auction, and raised EUR 812.5 million from the sale of 13-week debt. The Public Debt Management Agency reported the uniform yield at 0.67 percent, easing from 0.71 percent on November 7. The coverage ratio was roughly unchanged at 1.83, from 1.87. Bond yields have, however, remained stubbornly high: At 4.3 percent for the 10-year-bond, up 60 basis points from one year ago.

# EU Commission Vice-President Jyrki Katainen has declared the Juncker Fund a success, creating more jobs and investment than expected and benefiting countries like Greece that need the most help. The European Fund for Strategic Investments, Katainen said, has triggered more than EUR 370 billion in investments across the EU, beating the original target of EUR 315 billion.
The Juncker Plan, he said, had supported the creation of some 750,000 jobs _ a number expected to nearly double by 2020. “Looking at EFSI investment per country’s GDP, which is the only reasonable way to look at the impact. Greece: Number One. This makes me happy, everybody knows why,” he said. It was followed by Estonia, Portugal, Spain, Lithuania, Latvia, Bulgaria, Finland, Poland and Italy to make the top 10. (Video here, scrol to 11:00)

# Economic sentiment in Greece has failed to budge since November, according to the latest figures from the Foundation for Economic and Industrial Research, IOBE, its index now at 101.6 from 101.8. In its regular business and consumer survey, IOBE said industry and construction had fared worse than expected, but were offset by improvements in retail, services, and consumer confidence. Indeed, consumer confidence reached its highest level since March 2015, with successive improvement over the past six months.

On our Radar: Dent in Democracy
2018 was not a great year for democracy, with many European countries, including Greece, failing to reverse recent setbacks. The Economist Intelligence Unit’s annual Democracy Index placed Greece in 39th place in 167 countries, falling one place and remaining in the “flawed democracy” category. The first and last places on the index included no surprises. The top five were Norway, Iceland, Sweden, New Zealand, and Denmark, while the five worst countries were: Chad, the Central African Republic, the Democratic Republic of Congo, Syria, and North Korea.