• Southern countries see Mediterranean as “strategic corridor” for conveying gas to Europe
• Auction of T-bills raises EUR 812.5 mln
• Greece on the right track as long as it is willing to continue reforms, says Regling
• Power executive says sale of lignite plants faced with obstacles
# Greece, France, Italy, Portugal, Malta, Spain and Cyprus on Tuesday in Nicosia that they see the Mediterranean as a “strategic corridor” for conveying gas to Europe. The initiative which was launched in Athens over two years ago seeks to form common policies in the EU’s southern region. Amid Turkish objection to Cyprus’s exploitation of its natural reserves, French President Emmanuel Macron said he is “very concerned” and that he conveyed this to Turkish President Recep Tayyip Erdogan.
# A day after Greece’s return to the markets for the first time in the post-bailout era, the yield on EUR 625 million of 26-week treasury bills was at .75-percent, . The total number of bids reached EUR 1,340 mln and the amount finally accepted was EUR 812.5 mln – exceeding the requested amount by 2.14 times.
# ESM Managing Director Klaus Regling has reiterated that Greece is heading in the right direction but must stay on the path of reforms. Regling said that Ireland, Portugal, Spain and Cyprus are experiencing high growth and rapidly falling unemployment rates since the disbursal of EUR 295 mln of bailout funds in 2011. He said that Greece, which was also a recipient of the funds, “is also on the right track – provided that the country remains willing to continue reforms.”
# Referring to the Greek Power Corporation’s divestment process with the sale of four coal-fired power production units, the company’s chief executive Manolis Panagiotakis said yesterday that conditions are unfavorable and that the project is not easy as there are pending issues that have also been highlighted to the European Commission. He said if the country’s coal-fired power production units do not fetch a good price then it would be better that they are not sold. “Perhaps because we are being pressed by time some expect that they will get the units at a much lower price. This will not happen if the price is not reasonable. We also have alternative proposals to come back to complete the process,” he said.
On Our Radar: ESRB says inefficient legal systems encourage strategic defaulters
In its cited Greece as an empirical example of a country whose existing legal framework and its lack of judicial capacity has promoted the emergence of strategic defaulters. “An analysis conducted using a dataset, comprising loans for 13,070 firms for the period 2008-15, provides evidence that one in six firms with NPLs were strategic defaulters and highlights the importance of distinguishing the latter from financially distressed defaulters,” the ESRB said. It added that in order to deter non-payment behavior, there must be an efficient legal and judicial system providing greater transparency with regard to the extent of strategic default, combined with the right incentives for proactive NPL management.