Athens Digest 03.07.2019

• Bond rally takes yields to new lows ahead of poll

• Fresh obstacles for Hellenikon

• Bank of Greece says asset register needed to fight tax evasion

• Airbnb: Greece gained $1.4 billion from 2018 rentals

# Greek government bond yields sank to new historic lows, touching 2 percent for the 10-year-bond and continuing to close in on Italian rates. The 10-year yield settled at 2.196 percent after dipping to 2.09 percent, ahead of Sunday’s general election. The Greek rally fuelled speculation that the country’s debt management authorities would hasten a full return to markets and ease dependence on T-Bill auctions after the elections.

# The Hellenikon coastal development project has run into fresh difficulties after the Culture Ministry reportedly insisted that in addition to existing legislative amendments, all studies related to the construction of the Metropolitan Park at the site of the old Athens airport must be individually assessed and approved before a key Joint Ministerial Decision can be signed. The spat occurred at a meeting of the Central Administration Council for the Exploitation of Public Property, which is made up of the secretary generals of the ministries involved in the permission process. Greek developer Lamda, which leads the Hellenikon consortium, has repeatedly complained about bureaucratic difficulties holding up the EUR 8 billion venture.

# The Bank of Greece has published a set of proposals aimed at curbing tax evasion and the impact of the black economy. The central bank proposals include: Expanding the use of electronic payments with additional tax incentives to keep a better record of transactions. The introduction of capital controls in 2015 had one positive effect: The increased use of “plastic money” which helped increased VAT and income tax returns. Secondly: An increase in the annual number of tax inspections. And, third, the use of an electronic asset register to better monitor individual wealth.

The short-term property rental service Airbnb announced that its business contributed $1.4 billion to the Greek economy last year as it exceeded the $100 billion mark globally. In a survey of 228,000 responses, guests report doing 42 percent of their spending in the neighbourhood where the rental property is located. The top 5 countries benefiting from Airbnb were the United States at $33.8 billion in 2018, France at 10.8 billion, Spain at 6.9 billion, Italy at 6.4 billion, and the United Kingdom at 5.6 billion. Greece placed 14th.

On our Radar: Two-Tier Market 
Greece’s property market is stabilizing after years of decline and difficulty but areas with low demand from tourists and overseas investors are being left behind. Overall, apartment prices in the first quarter of 2019 were up nationwide by 4.0 percent on the year. Athens showed an increase of 5.8 percent, while the increase in Thessaloniki was 3.9 percent. The figures were included in the central bank’s annual Report on Monetary Policy that was published on Monday.