Athens Digest 11.04.2019

• IMF: Greece will meet surplus targets

Tsakalotos leaves fate of tax commitment open, tells state TV “everything will be considered at the appropriate time” 

Government to make tax rebate delays less costly with interest rate cut

Strong domestic demand boosting regional airport traffic increase


# Greece is in position to deliver its commitment of 3.5 percent primary budget surpluses annually through 2022, the International Monetary Fund reported in its Fiscal Monitor. The IMF said the primary surplus figure will remain high after 2022, edging down to 3 percent the following year and 2.8 percent in 2024. The forecast came a day after the Fund stuck with projections for Greek growth of 2.4 percent this year and 2.2 percent in 2020. The national debt is expected to drop to 174 percent of GDP this year and 167 percent in 2023.

# Finance Minister Euclid Tsakalotos has left open the possibility the 2020 tax hike could be shelved. Speaking to state-run ERT 3 television in Thessaloniki, Tsakalotos strongly indicated that scrapping the commitment was being considered, making a reference to a plan to slash pensions that was also axed at the start of the year. “I will say what I said about the pension issue: Everything will be considered at the appropriate time.” Tsakalotos conceded that there was opposition among euro area members to an early Greek repayment of IMF loans but said he expected critics of the plan to come round to the majority view. Tsakalotos is due to fly to Washington today to attend the IMF’s Spring Meetings amid reports in the Greek news media that he is expected to discuss the repayment issue at a meeting with Fund managing director Christine Lagarde.

# The government has put forward draft legislation to make tax rebate delays less costly thanks to an interest rate cut. Under the proposals, the interest rate for state debts to taxpayers and private entities will be slashed from 6 percent to 3 percent _ the current rate being “considered to be particularly high under present conditions,” according to the introductory text of the bill. Taxpayers who fall behind on payments to the state face penalty payments with 8 percent interest.

# Regional airport operator Fraport Greece has reported a first-quarter increase in passengers of 8.2 percent on the year, helped by improved domestic demand. The subsidiary of the German Airport Services firm said passengers at the 14 Greek airports it operates exceeded 1.92 million. March figures for traffic were up by 1.1 percent on the year. Domestic passenger traffic increased by 4.7 percent from March 2018. Airports at Santorini, Corfu, Kos, Kefalonia, Aktio, Kavala, and Levos saw a double-digit growth increase, while increases were also recorded at Samos and Thessaloniki.



On our Radar: Top Prosecutor Post at Stake
An 11-member panel of Supreme Court judges is due to discuss today whether to renew the term of Greece’s high-profile top anti-corruption prosecutor Eleni Touloupaki for another two years. Touloupaki’s role in major corruption cases remains politically controversial ahead of the general election this year, and she has been singled out for criticism by New Democracy. Today’s panel meeting is taking place as prosecutors are finalising an investigation into alleged links between senior Greek politicians and a corruption scandal surrounding Swiss drugmaker Novartis. Touloupaki was recently profiled in Politico.