Athens Digest 04.03.2019

• Moody’s cites reform momentum, raises Greece’s sovereign credit rating two notches

• Gov’t says it will submit draft law on first residence protection within the week

• Labor Minister insists debt repayment scheme will go ahead imminently

• New Democracy leader joins other conservatives calling for expulsion of Orban’s party from EPP


# Stressing  an “increasingly entrenched reform momentum,” Moody’s Investor Service raised Greece’s local and foreign currency issuer ratings from B3 to B1 on Friday. It also changed its sovereign outlook for Greece from positive a year earlier to stable. It added that there are “good prospects for further progress and low risk of reversal” – despite noting that “progress has been halting at times, with targets delayed or missed.” The rating, on a par with other agencies,  is seen as a positive message in view of Greece’s bid to issue a 10-year bond. Greece’s new ranking remains four levels below investment grade. Moody’s also said that Greece’s medium-term growth prospects will remain low unless investment accelerates significantly.

Amid negotiations with the country’s systemic banks and the European institutions on the first residence protection scheme for debtors, the government says that it will submit a draft law within the week. However, after a fruitless teleconference on Friday – to agree on the legal framework that will replace the so-called Katseli law – a senior banking official said “there is still some way to go.” Reports have noted that the climate of the talks has clearly improved but the impact the new framework will have on the balance sheets of the banks remains a thorn. The new first residence protection scheme, the PPC’s lignite units privatisation as well as arrears’ clearance are the most important issues to be solved ahead of the Eurogroup meeting, next Monday, March 11.

Even though last week’s enhanced surveillance report for Greece said the government has committed not to implement debt repayment schemes in the near future, Labor Minister Effie Achtsioglou has insisted that the scheme to settle arrears to social security funds with 120 monthly installments will be introduced imminently, probably in March.  According to Achtsioglou, the new arrangement will include a haircut on the principal amount and haircuts of 85-percent on the surcharges. She added that the new reduced debt may be repaid in up to 120 installments with a minimum installment of EUR50.

Echoing sentiments of other European conservatives, New Democracy leader Kyriakos Mitsotakis said on Friday that he will send a letter today to the center -right European People’s Party (EPP) calling for the suspension of populist Fidesz of Hungarian Prime Minister Viktor Orban until it drops its far-right rhetoric and complies with European values. So far, eight parties of the EPP – from Sweden, Belgium, Portugal, Finland and the Netherlands – have sent letters to its president urging the suspension of Fidesz.



On Our Radar: Academics urge EU to use all means to stop “persecution” of Athens journal by former minister
In a letter published in the New York Review of Books, dozens of academics have urged Jean-Claude Juncker and Donald Tusk to use all means at their disposal to save the Athens Review of Books from “ongoing persecution” by former foreign minister Nikos Kotzias. The letter said that Kotzias, who sued the journal in 2010, was engaged in “in an obvious attempt to shut it down” after the freezing in 2017 of its revenues from the Press Distribution Agency and the bank accounts of its publisher and chief editor. The journal had published a reader’s letter that referred to him as a “gauleiter of Stalinism.” According to the letter, “court rulings in 2015 and 2017 considered the characterization “gauleiter of Stalinism” to be defamatory, ignoring the fact that it is a political value judgment about a public figure. There is evidence that the minister and the government interfered in the course of justice in order to persecute the journal.”