• Current account balance worsens in 2018
• New poll: Conservatives maintain strong lead
• Mitsotakis promises to double growth, renegotiate surplus deal
• Piraeus port: Development plan doesn’t win full approval
# Greece’s current account deficit surged to EUR 5.3 billion in 2018, a 68 percent increase from the previous year, . The annual figure increased EUR 3.2 billion in 2017 following a poor performance in the balance of services and primary incomes. The December figure was a deficit of EUR 1.5 billion worse on the year by EUR 41 million.
# New Democracy has stabilized a strong lead over the governing Syriza party and is on course to secure an outright majority in the general election. A Public Issue poll tracking voting influence of the main political parties gave the conservatives a projected 39 percent of voter support. Also, Syriza garnered 24.5 percent, Pasok 8.5, Golden Dawn 7.5, KKE 6.5, and newcomers Greek Solution, led by firebrand nationalist TV commentator Kyriakos Velopoulos, attracted 3 percent _ the threshold needed for parliamentary representation. Although New Democracy’s lead has slipped by two points since November, the party appeared to be in a stronger position _ eyeing outright victory in several election scenarios.
# Greece’s opposition leader has promised rapid business-friendly reforms if his New Democracy party wins the general election _ aimed at boosting growth to 4 percent in the short term and earning the country the right to renegotiate “in good faith” its high primary surplus commitments for 2021 and 2022. , Mitsotakis said he would speed up current plans to cut corporate tax rates, reducing the rate to 20 percent in two years. “I’ve said from the beginning that I respect the agreements made by the current government but I’ve also told my European partners that should we would be able to deliver real reforms, we should be rewarded with smaller primary surpluses.
# Chinese shipping giant Cosco has failed to win full backing from planning authorities for its EUR 580 million investment programme for the Port of Piraeus. According to reports, port regulators only provided partial approval for the development plan, leaving out ventures that include a proposed shipyard, hotels and a shopping mall. There was no immediate reaction from Cosco which has insisted that the development “master plan” should be considered in its entirety. The company has a EUR 300 million investment commitment required to receive an additional 16 percent stake in the port.
On our Radar: Regional Bond Bounce
Successful recent bond auctions in the Eurozone periphery have created positive conditions for upcoming actions by Greece’s Public Debt Management Agency, but a decision at the March 11 Eurogroup on whether to grant Greece ECB bond profits remains an important factor. According to the latest “Greek Fixed income Monitor” by Piraeus Bank, the results of last month’s 5-year bond auction for EUR 2.5 billion were encouraging, being more than four times overscribed, with a respective yield and coupon of 3.6 and 3.45 percent, and strong investor interest in the secondary market. “One of the most important reasons for these movements was that the bond issue took place amid high demand for bonds in the periphery: In Spain (10-year), Portugal (10-year), and Italy (16-year), all showing equally high investment demand, and confirming that the success of the bond issue at this specific time was due to the close correspondence between the Greek bond market and those of the countries in the region.”