Athens Digest 14.06.2019

• Polls give Mitsotakis clear win _ in seven-party parliament

• ESM: More reforms needed to sustain growth

• Regling says Greece’s budget risk is real

• IMF inspectors to visit after election


# Two new opinion polls published last night project a clear win for Kyriakos Mitsotakis’ conservative New Democracy, with an outright victory seen as the most likely outcome. A Pulse survey for Skai television gave ND an 8-point advantage with 33.5 percent of the projected vote. It was followed by Syriza at 25.5 percent, the Movement for Change at 6.5 percent (losing ground from its 7.8 percent support in the European elections), KKE with 5.5 percent, and Golden Dawn at 5 percent. Yanis Varoufakis’ MeRA25 (3.5 percent) and Kyriakos Velopoulos’ fringe right-wing Greek Solution party (3.0 percent) also exceeded the 3 percent threshold. Some 8.5 percent of voters remain undecided. Seat projections by Pulse gave New Democracy at least 152 MPs (or 156 MPs in a six party house) _ results that were similar in an MRB survey for Star television which gave ND a 7.6-point advantage ahead of the July 7 elections.

# The European Stability Mechanism says, despite improvements, Greece still faces hurdles to achieving sustainable growth after ending its bailout programmes. “For the future, it will be important that Greece combines its post-programme commitments with policies and public investments that support the economy’s recovery, strengthen market confidence, and sustain growth,” the ESM said in its annual report for 2018. More work was needed, it said, to legally safeguard reforms to prevent court reversals, broaden the tax base, create a more business-friendly environment, continue an efficiency drive in the public sector, and reduce the time needed to resolve legal disputes.

# ESM Managing Director Klaus Regling has renewed a spending warning to Greece, arguing that the country’s 2019 primary surplus target is now facing a clear threat. “We are quite confident together with the Commission that this risk is really there, that the primary surplus might be missed by a significant margin,” Regling told a news conference. “We also are concerned because the commitment to consult with the Institutions on important fiscal measures was not adhered to over the last few weeks. And that relates not only to the measures like additional pension payments and social handouts but also to the action in the Greek parliament to scrap the pre-legislated tax reforms … That’s regrettable and it was done without consultation. And also the amendment to the HCAP law that happened in the Greek parliament just before the end of their session was done without any consultation, which is clearly a breach of the agreed process. So, we will come back to all these things, of course, with the new government.”

# IMF inspectors will wait until after the July 7 general election to visit Greece, fund spokesman Gerry Rice has confirmed. “Clearly … we would want to wait for the elections to take place,” he said during a Washington briefing. “We will wait for the elections to happen and then we will put a timetable in place for the next Article Four (inspection).” Rice added that Greece’s request to repay IMF loans early was still pending. “As I’ve said before, it’s our understanding that Greece needs to get the agreement of the European partners before this can advance further. So I think that that’s where it stands.” (Video here – scroll to 9:18)



On our Radar: Left Behind
Unemployment has continued to broadly decline since the crisis-era spike but a growing number of Greeks are unskilled workers or have never had regular employment. The independent Statistical Authority said the unemployment rate was 19.2 percent in the first quarter of the year, from 21.2 percent a year earlier, but up from 18.7 percent in the previous quarter. Low skilled, non-manual workers now make up the largest segment of the workforce, exceeding a third of the total and up from roughly 25 percent at the start of the financial crisis. Also, 19.1 percent of the unemployed have never worked in the past, while 65 percent of the jobless total are long-term unemployed (more than a year). And 32.2 percent of the total have not worked for more than four years.