Athens Digest 28.01.2019

• Creditors conclude mission as several pending issues remain open

• IMF predicts rise in growth from 2018 but warns of dangers ahead

• Reports says minimum wage will rise by 8-percent

• Tsipras, Mitsotakis provide conflicting narratives to Economist


# The representatives of the institutions completed their  mission in Athens on Friday but with several issues still pending. More specifically, the mission assessed the implementation of the 16 reform commitments Greece made in June including the framework that will replace the Katseli law which is still pending. In the meantime, the Finance Ministry is expected to submit the strategy to deal with NPLs to the EC Directorate-General for Competition. According to a joint statement, the European institutions said that detailed conclusions of their mission in Athens will be published on February 27. “Close dialogue on economic policy challenges and priorities will continue going forward (…)This report will serve as a basis for the Eurogroup to agree on the transfer of SMP-ANFA income equivalent amounts and the cancellation of the step-up interest margin on certain EFSF loans,” the statement said.

# Meanwhile, the IMF said on Friday that growth is projected to reach 2.4 percent in 2019, up from an estimated 2.1 percent in 2018 and that “medium-term public debt repayment capacity remains robust.” It noted that Greece must press ahead with its unfinished reform agenda and draft a contingency plan to deal with “potential fiscal shocks from ongoing court cases to core pension and wage reforms, as well as from contingent liabilities such as guaranteed bank loans.” It added that the government should prioritize cuts to wage and profit tax rates, funded by the planned broadening of the personal income tax base next year.  With regard to the labor market, it said that greater flexibility would help mitigate any negative effects to competitiveness and employment from wage pressures in excess of productivity growth and the abolition of the youth minimum wage.

# According to the state-run ANA-MPA agency, the Labor Ministry is planning an 8-percent increase in the minimum wage – to EUR 633 from 586. The final decision on the exact level of the rise, which will affect some 400,000 workers, is expected in coming days – most likely tomorrow – so that the new minimum wage will go into effect as of February 1. The measure will have no age discrimination,  meaning the subminimum for under-25s will be abolished.

# In the wake of the ratification of the Prespa deal with FYROM on Friday, Prime Minister Alexis Tsipras sought to switch the agenda to the economy in an article published in the Greek edition of the Economist. He noted Greece’s positive course after its exit from the fiscal stability program, saying the structural aspect of his strategy is the redistribution of wealth. This, he said, is being achieved through the re-introduction of collective bargaining, the crackdown on undeclared workers and wage increases. His assertions were challenged in remarks to the same publication by New Democracy leader Kyriakos Mitsotakis who said that despite the completion of its third bailout program Greece has “not turned a page.” “Market confidence has not been restored, competitiveness is dwindling, the quality of institutions has been undermined and the economy is experiencing an anemic growth rate.”



On Our Radar: Giannis and LeBron
Milwaukee Bucks superstar Giannis Antetokounmpo was selected last Thursday to captain this year’s All-Star NBA game  next month.  He was picked as the Eastern Conference All-Star Captain, after leading the Eastern Conference in votes. LeBron James was voted as captain of the Western Conference.  Antetokounmpo got  4,375,747 votes behind James with 4,620,809.