Athens Digest 25.06.2019

• Growth warning from budget watchdog

• New criminal code worrying judges, anti-corruption body

• Another poll see New Democracy avoiding hung parliament

• Stournaras: Next government should “secure and deepen” reforms

# A fiscal watchdog says Greece’s economy will need to have a “considerably stronger performance” in the coming quarters for the country to meet its growth 2019 target. A report by the independent Hellenic Fiscal Council _ a body created to monitor fiscal projections and compliance with fiscal rules _ noted that 1.3 percent growth in January-March of 2019 was the worst performance in the past two years. “Achieving the goal of annual growth of more than 2 percent will require a considerably stronger performance in the next quarter of 2019,” the report said.

# A Council of Europe anti-corruption body will hold a special investigation in Greece to determine whether a change in the country’s criminal code will adversely affect corruption cases. “At issue is a provision that would convert many felonies into lesser misdemeanors, which could close many felony cases, a number of which involve corruption-related offences,” the organisation said in a statement. Greece’s Association of Judges and Public Prosecutors also requested that amendments be suspended for several articles fearing the mass release of criminals and a threat to the legal system posed by scrapping a fee required to file a lawsuit. The Council of Europe’s Group of States against Corruption, GRECO, will also carry out a special investigation in Slovenia.

# New Democracy has returned to a double-digit lead and is increasing its chances of avoiding a hung parliament, according to a new opinion poll. The conservatives have  34.3 percent, pulling ahead of Syriza with 23.8 percent, with the Movement for Change being third with 6.6 percent followed by the Communist party KKE with 5 percent, the Marc poll for Antenna television found. Seat projections favour New Democracy obtaining a governing majority with 156 MPs and Syriza 75. Varoufakis’ MeRA25 follows with 3.4 percent, overtaking Golden Dawn at 3.2 percent. The far-right Greek Solution got 3.2 percent, too. The undecied vote was found at 9.9 percent.

On our Radar: Old Mistakes 
Yannis Stournaras, the central bank governor, is urging the next government to “secure and deepen” reforms introduced during bailouts to ensure that Greece does not return an era of poorly controlled spending. “We must not repeat the old mistakes,” Stournaras told the German Handelsblatt in an interview. “For budget adjustment we have achieved and this lessons involved, we paid too high a price to forget.” He renewed a warning that government social benefit spending announced several weeks ago would push the budget performance off target, and produce a primary surplus from a planned 3.5 percent of GDP to 2.9 percent. At the same time, he repeated that the planned targets are too high, hindering growth.