Athens Digest 10.05.2019

• IMF signals agreement for early Greek repayment

• Government “moving in opposite direction” to reforms needed, says IMF’s Dolhman

• New poll: New Democtacy keeps strong led, handouts help Syriza narrow gap

• Government angry with Facebook over Greek hoax-detector

• Is Greece still reforming? Check your taxi fare


# IMF spokesman Gerry Rice says Fund is supportive of Greece’s request to pay back higher interest loans early. “The Greek authorities have informed us that they hope to pre-pay the part of the outstanding IMF loan that is subject to surcharge rates,” Rice said. “That’s about 40 percent of the outstanding loan. We agree with the Greek authorities that this makes good sense from a liability management perspective though it’s our understanding that Greece would need to get agreement from the European partners before this can advance.” Rice added that there would be a “full assessment” of Greece’s policies during Article IV consultations over the summer (video here, scroll to 21:30)

# Despite improvements to the Greek economy, the country remains seriously challenged by its adverse demographics and needs to improve is fiscal policy mix, Peter Dolhman, the IMF mission chief for Greece, has warned. “Tax rates are too high. And social spending and investment are too low. This is not only detrimental for growth but also for payment compliance and social cohesion,” he said, adding that spending hikes announced by the prime minister this week were not in line with the need to double down on reforms. “Unfortunately, several recent announcements suggest the government is moving in the opposite direction aiming to narrow the VAT base and continuing to exempt over one half of the population from paying personal income tax by foregoing the 2020 personal income tax reform. The government is also putting future tax compliance at risk through three new tax installment schemes this year which threaten a return to the old ways.”

# Syriza has narrowed the gap with New Democracy in an opinion poll after announcing tax relief and other handouts for 2019 and 2020. An MRB poll for Star television gave the conservatives a 7.4-point advantage over Syriza in voting intention for the European Parliament elections, from 9 points a month ago. The results were: New Democracy  30.2 percent, Syriza 22.8 percent, Movement for Change 6.5 percent. Golden Dawn 6.2 percent, KKE 6.1 percent. The advantage was 7.6 points in polling for a national election with a projected lead of 8.9 percent (when factoring in the undecided vote).

# The government is threatening to take a complaint against Facebook to the EU Commission over its choice of fact-checking service in Greece. Facebook has partnered with Ellinika Hoaxes online service to assist in Greece ahead of the European elections, a decision which was not welcomed at all by Syriza ruling party. Deputy digital policy minister Lefteris Kretsos claimed the service lacked the credentials required for the task.



On our Radar: Is Greece still reforming? Check your taxi fare
Last year, Greece’s Ministry of Transport backed new legislation that imposed prohibitive limits on digital platforms like Uber, Daimler, and others, obliging them to only work with taxis for urban transport services. The powerful taxi owners’ association managed to maintain its privileges in the market throughout the crisis _ a case noted by the IMF’s Peter Dolhman as an example of the country’s pressing need to push for further reforms. “Greek consumers continue to overpay for services,” he said. “Taxi prices, for example, rose 17 percent between 2010 and 16 despite a flat overall level of inflation during that period. The bottom line is that more is needed to make Greece more competitive inside the euro area and more resilient to economic downturns.”