Athens Digest 02.05.2019

• Early IMF repayment to be raised at Eurogroup’s working group

• New Democracy expected to bring cancellation of tax reform to parliament

• Weak investment hits economic sentiment

# Greece is expected to note its intention to repay IMF loans early at a meeting today of the Euroworking group. George Chouliarakis, the deputy finance minister, is expected to make Athens’ case at the Brussels meeting, although Greece is not officially on the agenda. The government is also seeking an ahead-of-schedule budget revision despite indications of opposition to the proposal. Inspectors from the institutions will be back in Athens next week to prepare the third enhanced surveillance report.

# Kyriakos Mitsotakis said his New Democracy party will submit draft legislation to parliament to cancel a bailout commitment to lower the tax threshold in 2020. The bill, he told Antenna television in an interview, would test the government’s resolve to make a commitment on the issue ahead of a general election. Mitsotakis ruled out forming a grand coalition with Syriza if the next election produces a hung parliament, describing his opponent as a “political opportunist.” But he adding that he was open to the idea of collaborating with other political parties. In response to his remarks, the prime minister’s office said New Democracy would soon again “find itself in a difficult position” on whether or not to back government plans on how to spend above-target budget surplus money.

# Economic sentiment in Greece suffered a setback in April, according to figures sent by Greece’s Foundation for Economic and Industrial Research, IOBE, to the EU Commission. The index declined to 100.1 points, from 101.3 points over the previous two months, due to weak investment. Last autumn, industry representatives reported an increase of 32 percent in value and 29 percent in volume on an annual basis, but in March and April they reported a decrease of 1 percent in value and 3 percent in volume. The next report of business and consumer surveys for April results will be released on Monday.

On our Radar: Power Perils 
The ratings agency S&P has maintained its CCC+ rating with a positive outlook for Greece’s Public Pοwer Corporation amid an ongoing political row over the company’s prospects. The company announced significant losses in its 2018 financial results. “The company’s current committed credit lines should support its liquidity needs for the next 12 months … our positive outlook on PPC mirrors that on Greece and we continue to expect that PPC will receive extraordinary support from the Greek government in the event of further financial stress,” S&P said.