Athens Digest 08.02.2019

• Commission sees growth over 2 percent in Greece ‘heavily contingent on reforms”

• Weber hints at easing pressure for high Greek surpluses

• Min Fin Tsakalotos asks parties to leave banks out of campaign rhetoric

• Commission OKs Eurobank-Grivalia merger


# According to the European Commission’s Winter Forecast, Greece’s economygrew at an estimated rate of 2.0 percent in 2018 and is expected to continue growing at over 2 percent in the coming years (2.2 percent this year and 2.3 in 2020), although the economy’s recovery remains heavily contingent on the continuing implementation of reforms. The Commission also added a note of caution: “Export growth is expected to moderate, as the tourism sector faces slowing demand growth and renewed competition from Turkey. Goods exports are also set to weaken but should remain on an increasing trajectory despite the slowdown in the EU.” In Washington, IMF spokesman Gerry Rice said the fund’s view remained that “swift, comprehensive and well coordinated actions” were needed to address banks’ bad loan problem and achieve a faster reduction.

# European conservative candidate Manfred Weber has hinted in Athens that Greek primary surplus targets could be relaxed if a reform-friendly government emerges from the next general election. Weber, who attended a European People’s Party even in Greece, launched a strongly worded attack on the Tsipras government, and insisted Greek voters would turn their back their back on his spending-led campaign. But his harshest criticism was expressed over the Venezuela crisis and Athens’ support for Venezuelan President Nicolas Maduro. He argued that the crisis highlighted the need to scrap the veto in EU decision-making so that decisions “are not anymore in the hands of governments like here in Greece which have obviously more contact with Putin and Maduro and not so much with the free world of democratic countries.”

# Finance Minister Euclid Tsakalotos has urged political parties to tone down references to banks, apparently concerned that poorly informed public statements could hurt their recovery. “All sides much display some seriousness when we are talking about the banks,” he told Parliament. “The banks have been through a crash test, are meeting their targets, and are also taking private initiatives to reduce the volume of non-performing loans. The government is also working on a system of guarantees to reduce those (soured) loans.”

# The European Commission has backed a proposed merger between Eurobank and real estate firm Grivalia Properties _ a move aimed at helping the bank slash its non-performing and soured loan stock. A Commission decision said the deal did not violate state aid commitments. The deal was announced last November and shares in the merged company are due to start being traded in late April.



On our Radar: Lawmakers back NATO protocol
Parliament Defence and Foreign Affairs Committee has approved the NATO accession protocol for FYROM, paving the way for Greece’s formal approval today following a debate in plenary session. A vote in favour of the motion, as expected, would see FYROM formally change its name to North Macedonia after being officially notified of the Greek decision. All 29 NATO members must individually ratify the protocol before the country can join.