Athens Digest 12.07.2019

• Mitsotakis: “Credibility” will open way for talks on primary surpluses

• Arghyrou tapped as new EWG rep

• Pension reforms to alter auxiliary system

• East Med still busiest migrant route, says Frontex

Kyriakos Mitsotakis has insisted that talks can be started with creditors to renegotiate primary surplus targets, despite strong disapproval expressed at the idea at a Eurogroup meeting earlier this week. “Once I establish my credibility _ which I hope I will do very soon _ I will renegotiate,” the new Greek prime minister told the BBC’s Hardtalk programme. “I will have opened the discussion with our creditors regarding the primary surpluses. I’m not going to do it on day one but … every single economist agrees the (3.5 percent target) is excessive.” Mitsotakis renewed a pledge not to fire any civil servants, and added: “If anything, we need to start adding civil servants but we will do it in an organised way by making sure we add jobs in the civil service according to our financial ability and also hiring people where we really need them.”

Economist Michael Arghyrou has been named as the new head of the Finance Ministry’s Council of Economic Experts who will represent Greece at the Euro Working Group. Arghyrou is a reader in economics at Cardiff Business School, University of Cardiff. His appointment was announced as new Finance Minister prepared for a briefing tomorrow of the prime minister on preparations for a tax reform bill and the government’s positions that will be presented to parliament next week. The new session of parliament will open on July 17 with the new speaker to be elected the following day and a three-day debate to be held before MPs ratify the new government on July 21.

The government is planning a further overhaul of the pension system with a drive to move to an online process and shake-up of auxiliary pensions. Notis Mitarachi, the deputy labour and social security minister, announced that auxiliary pensions will be switched to a fund-raising model _ based on savings per individual rather than distributing income to retired workers. The creation of a mixed system for pensioners would, he argued, provide better security. Critics of the proposed reform, including the Syriza party newly in opposition, argue that it would essentially privatise part of the pension system and expose retirees to market risks.

On our Radar: Frontex Reports Traffic Increase
The European Union border protection agency Frontex says the number of illegal border crossings detected rose by 6 percent in June from the previous month to around 8,300 _ bringing the total for the first six months of 2019 to some 42,000. The Eastern Mediterranean remained the busiest route with nearly 4,000 detections in June and 21,500 in the first half of the year. “One out of four migrants detected on this route were nationals of Afghanistan, usually arriving by sea,” Frontex said.