Athens Digest 15.01.2019

• Confidence vote: Magic Number 6

• EU backing deal but steers clear of domestic trouble

• Privatisation delays upset state budget numbers


# A two-day debate to renew confidence in Alexis Tsipras’ government starts this morning following the collapse of his 4-year-old coalition. To receive 151 votes, the Prime Minister needs the support of at least six MPs from the large pool of independents and lawmakers from parties unlikely to win re-election. He has already secured three. Tourism Minister Elena Kountoura, and the deputy agriculture minister, Vassilis Kokkalis have both refused to follow the Independent Greeks (ANEL) and were expelled by party leader Panos Kammenos. Independent but close to ANEL MP Katerina Papakosta, who was given a surprise Cabinet post last August, is reportedly the third declared supporter. That leaves two more members of Independent Greeks (Papachristopoulos and Zouraris who are not expected to be expelled though) and one from the centrist Potami (Danelis) as the likely cross-overs. Responding to the rash of defections, opposition leader Kyriakos Mitsotakis called the coalition breakup a “sham divorce” and demanded a snap election. The confidence vote will be held at midnight tomorrow.

# With the vote tomorrow, Greece’s ratification of the Prespa Agreement on Macedonia will be pushed to next week at the earliest. The European Commission again praised the deal, but insisted it was staying out of domestic politics. “We never comment on internal political developments in our member states … We are following the political developments closely,” Commission spokesman Margaritis Schinas said. German Chancellor Angela Merkel repeatedly referred to Greece’s neighbor as North Macedonia while on her visit to Athens last week, but her spokesman Steffen Seibert also avoided making any reference to the Greek government dispute, expressing faith in the ratification process.

# State budget figures ended with disappointment in 2018, missing the primary surplus target by EUR 443 million. Failure to complete privatisation plans at Athens International Airport kept revenues from privatisation at just EUR 234 million, well off the EUR 1.133 billion target. Spending was EUR 572 million below target. And public investment was EUR 513 million below. The latest figures do not jeopardise the Greek commitment to achieve an annual primary surplus of 3.5 percent as they do not cover the broader, general government tally.



On our Radar: Focus back on banks 
PM Tsipras set out the government’s unfinished work on Sunday when he called for a confidence vote in parliament: Raising the minimum wage, finding a replacement scheme to protect troubled mortgage-holders, and helping taxpayers who have fallen behind. There was no mention of the country’s troubled banking system, heavily burdened with soured loans and still awaiting a finalised relief plan. The uncertainty over the Greek elections, coupled with ongoing political turmoil around Europe as put the spotlight back on the struggling area of Greece’s recovery. The coalition collapse “comes at a delicate time for the country’s suffering financial sector,” banking commentator Frances Coppola wrote in the Financial Times. “Greece’s banks have survived the country’s economic depression but they have paid a heavy price: they are barely profitable, their balance sheets are stuffed with non-performing loans and crucially – they are not lending.” (article here, FT subscription needed)