Athens Digest 05.04.2019

• Debt relief payout another plus for investment, says Moody’s

Arrears back up despite commitment to creditors

Poll: Mitsotakis’ conservatives consolidate lead

Internet rumours trigger migrant clashes near border

Global award for Piraeus Bank

Approval by Euro area finance ministers of Greece’s billion-euro debt relief payout, expected in Bucharest today, is the latest in a series of positive events for investor sentiment, according to Moody’s. The ratings agency said it also expected Greece to get the nod from European creditors for the early repayment of IMF loans. Further, the full repayment by Greek banks of emergency liquidity assistance from the Bank of Greece will ease funding costs, Moody’s said. Greek banks had relied on ELA for the past four years. The ELA-ceiling reached a whopping EUR 88.9 billion in late 2015

New Finance Ministry data shows an increase in arrears by the state to the private sector for a second straight month despite pressure on the government to reduce arrears levels as part of its commitments under the post-bailout surveillance programme. The figure for the general government in February was EUR 1.669 billion from EUR 1.578 billion in January. The December figure stood at EUR 1.525 billion.

Kyriakos Mitsotakis’ New Democracy party was given a 9-point lead over Syriza in a poll published last night for next month’s European elections. The MRB poll for Star television put the conservative vote at 30.1 percent and Syriza support at 21.1 percent, followed by the Socialist Movement for Change and Golden Dawn at 6.2 percent and the Greek Communist Party at 5.5 percent. MRB gave New Democracy an 8.1-point advantage in polling for a general election, broadly unchanged from five months ago. Mitsotakis also improved his rating against Alexis Tsipras as the most suitable candidate for prime minister with 35.5 percent approval against the incumbent’s 26.6 percent.

Migrants have clashed with police outside a large camp in northern Greece after trying to force their way through a security cordon and reach the border with North Macedonia. Police fired tear gas and stun grenades at scores of rock-throwing protesters. The incident occurred outside the Diavata camp near Thessaloniki, some 60 kilometers south of the border. The United Nations Refugee Agency, UNHCR, said the protest had been triggered by false rumours spread on social media, and described attempts at mass irregular border crossings as “risky and dangerous.”

Piraeus Bank has received the global award in the category Emerging Markets Continued Excellence for the European region from Global Custodian.The ceremony took place at the Dorchester Hotel in London on March 28. Custodian celebrated its 30th anniversary at the annual Leaders in Custody awards.

On our radar: Investment Momentum at Risk
While Greece remains well below the EU average in foreign investment, major privatisation and development projects are still in doubt, including Cocso’s redevelopment at the Port of Piraeus, the sale of a controlling stake in Hellenic Petroleum, and even the divestment at the Public Power Corporation with the delayed sale of coal-fired power plants. Declan Costello, the EU Commission’s mission chief in Greece, recently pointed out that more than EUR 15bn investment is missing to reach the EU average. Greece’s former representative at the EWG described the need for higher foreign investment as a “paramount” issue for Greece. “What is needed is not only an increase in the share of investment in GDP, but also a change in the composition of investment: More business investment and less investment in dwellings,” Panos Tsakloglou, professor of International and European Economic Studies at the Athens University of Economics and Business and former Greece’s representative at the EWG told the Athens Digest. “Financing of investment activities remains a serious challenge, with the banking system unable to successfully play the role of financial intermediary. At this juncture, attraction of foreign investment is of paramount importance.”