Athens Digest 03.04.2019

• Commission still awaiting details on Geek insolvency rules

• Bloomberg: Greek officials confirm that the government is working on plans for the early repayment of IMF loans

• EU funds Greek projects for gas pipeline, island power link, and public admin telecoms system

• Tsipras promises North Macedonia help with investment, EU membership

# The European Commission says it is still studying details of Greece’s new household insolvency regulations ahead of Friday’s Eurogroup in Bucharest where euro area finance ministers will decide on a debt relief payout of nearly EUR 1 billion. “We’re conducting an assessment of the primary legislation on the household insolvency law that has now been adopted by the Greek parliament,” Commission spokeswoman Annika Breidthardt said. “Once the secondary legislation is presented we will also analyze that as part of the comprehensive assessment. The institutions remain in constant contact with the Greek authorities to settle any remaining issues and ensure that an agreement can be reached ahead of the April 5 Eurogroup _ on Friday.”

# Meanwhile, the government is working on plans for the early repayment of IMF loans, but necessary approval from European lenders may not be guaranteed, according to a Bloomberg report. The agency said two Greek officials confirmed that the government was examining early repayment options _ a preference that has been publicly stated by government as well as Prime Minister Tsipras.

# The European Union has slated EUR 263 million in funding for Greece-related infrastructure projects that include a 182-kilometer gas pipeline from northeastern Greece to Bulgaria (Komotini-Stara Zagora). The forward-and-reverse pipeline system would connect the two countries’ gas transmission systems in the aim of providing diversification and reducing European dependence of Russian suppliers. The funding announced by Regional Policy Commissioner Corina Cretualso includes money for an electricity connection by undersea cable between Crete and the mainland system, and the installation of the public sector telecoms network ‘Syzefxis II’ over the next four years. The projects are being funded under a EUR 4 billion investment package for infrastructure projects across 10 member states.

# Alexis Tsipras has become the first Greek PM ever to pay an official visit to North Macedonia, and promised his neighbour help with investment, integration with western military structures, and its aspiration to join the European Union. Tsipras travelled with more than 100 business people and leading members of his cabinet including the ministers of defence and economy as well as the Deputy PM Yannis Dragasakis. “For the first time in 27 years, we have put things in order … There’s a lot catching up to do,” Tsipras said. That catching up includes plans to provide Greek air force patrols of North Macedonia’s airspace, boost trade incentives, and revive a rail link that connected Greece with western Europe.

On our Radar: Housing Improvement Helping Banks 
Ratings agency Moody’s says improving house prices in Greece will help banks reduce the high volume of soured loans. “Greek house prices will continue to increase moderately over the next 12 to 18 months, a credit positive for Greek covered bonds, residential mortgage-backed securities and banks,” Moody’s Investors Service said in a report. Making the first gain in a decade, house prices increased by 1.5 percent in 2018, helped by overseas investment in the Greek real estate market. “Rising house prices will limit the losses in mortgages backing covered bond and RMBS if borrowers default and properties have to be sold to recover unpaid debt.”