Athens Digest 23.05.2019

• Handouts setting Greece back app. EUR 1.4 billion

• New Democracy makes marginal gain ahead polls

• UBS survey sees investors holding out for Greek bank surprise

• Unfinished projects worth EUR 25bn, PwC infrastructure review finds

# Despite insistence from Finance Minister Euclid Tsakalotos that the government’s spring benefits package would not affect Greece’s budget execution, creditors are expected to say that the measures may cost EUR 1.4 billion in 2019. The cost of sales-tax cuts, additional pension payouts, and a new tax repayment installment scheme will be detailed in a report currently being prepared under the third enhanced surveillance mission. The report is also expected to note delays in the privatization programme, as well as in efforts to reduce non-performing loans and set up a debt-settlement IT platform.

# New Democracy has made marginal gains with a 7.2-percentage point lead over Syriza ahead of Sunday’s elections. The Metron Analysis poll for Alpha television gave the conservatives a half-point gain from a previous poll conducted this month. The latest results were New Democracy 30.3 percent, Syriza 23.1 percent, Movement for Change 5.6 percent, Golden Dawn 5 percent, KKE 4.8 percent, undecided 7.5 percent.

# UBS says there is room for positive surprises for Greek banks despite maintaining its neutral position. Data from an Evidence Lab survey found that “most investors prefer to stay on the sidelines, 44% neutral (but with) net sentiment is skewed to positive, with an 18 percentage point bullish-bearish difference.” Investor hesitation, it said, mostly stemmed from the need for detail on additional action required to reduce non-performing loans.

# Unfinished Greek infrastructure projects are worth EUR 25 billion, according to a PwC survey. The largest share, worth EUR 10.6 billion, concerned energy infrastructure, and was followed by rail and motorway projects. “In Greece, there is a systematic infrastructure investment gap of 0.7 percentage points of GDP, resulting in a EUR 13bn permanent shortage over the past 10 years, created by the deep recession and consequent budgetary constraints,” the study said.

On our Radar: Dean’s Office Attacked 
Athens University of Economics and Business says a group of around 10 attackers stormed into the dean’s office yesterday and vandalized it, accusing him of cooperating with police to help prosecute unlicensed campus vendors. “Such unlawful and undemocratic actions have no place in the university,” a statement from the university said. “The state must guarantee the democratic and orderly functioning of the public university. The prolonged tolerance of the illegality that is endemic on campus grounds is creating adverse conditions for the operation of the Athens University of Economics and Business.” Greek law bans police from entering university grounds without specific permission from academic authorities that is rarely granted.