Athens Digest 04.06.2019

• Third enhanced surveillance report expected tomorrow

• Deadline for the submission of tax declarations extended

• Piraeus Bank and Intrum agree long-term strategic partnership to tackle NPLs

• Economic sentiment slightly improves after government’s handouts

# The third enhanced surveillance report of the Greek economy by the European institutions is expected to be released tomorrow. It will describe fiscal shortcomings and refer to a series of reforms that Greece committed to after the end of the ESM program but has yet to implement. Nonetheless, discussions between the institutions and the Greek Authorities will continue when a new government is formed after next month’s national elections. Greece was not on the agenda of yesterday’s EWG; the Ministry was represented by a lower ranking official and not by Alternate Finance Minister George Chouliarakis.

# The Finance Ministry has announced that the deadline for individual taxpayers and businesses to upload their income tax statements has been extended from June 30 to July 29 – after national elections on July 7. The extension will not change the timetable for payment of income tax installments. It also reportedly plans to do the same with applications to enter payment plans of 120-monthly installments for debts to the state and pension funds.

# Piraeus Bank, Greece’s biggest lender, announced yesterday a strategic partnership with Sweden’s Intrum to create a market-leading servicer of non-performing assets in Greece. The bank said the new platform will be worth an estimated EUR410 million. Piraeus Bank’s internal Recovery Banking Unit platform will be transferred to a new servicer company; 80% of the new servicer company will be held by Intrum and 20% by Piraeus Bank.  The new servicer company will enter into a contract to service the Bank’s existing €27bn NPE portfolio together with any new inflows, on an exclusive basis. “This Transaction is a milestone for Piraeus Bank in terms of its de-risking strategy,” Christos Megalou, Piraeus Bank’s Chief Executive Officer, said. “We have found in Intrum the right long-term industrial partner to proceed with this joint venture,” he added, noting that it will enable the bank to boost the efficiency and effectiveness of managing its non-performing exposures.

On our radar: Economic sentiment slightly improves in May
Economic sentiment  improved slightly in May but remained lower compared to the same month last year, according to  the Foundation for Economic and Industrial Research (IOBE). More specifically, economic sentiment in May rose to 100.8 points from 100.3 points in April but was down compared to 103.6 points in May last year. Overall IOBE’s survey showed that consumers were more optimistic, while business expectations were a mixed bag.  “Although the improvement is relatively slight, it brought the indicator to its second highest level since December 2009,” IOBE said. It noted however that almost all of the research was completed before the European Parliament, local and regional elections. “Therefore, it includes the pre-election environment but not the impact of their results,” IOBE concluded. Moreover, government’s handouts in the run up to European elections did not show an impact on business expectation indicators in May. They may have prompted to a gentle rise in consumer confidence.