Athens Digest 19.08.2019 [weekly edition]

• Revenue exceeds targets in first seven months

• PM begins European tour this week to make case for reduced primary surplus targets

• Government eyes changes in debt service and use of ANFAs and SMPs returns in public investment program

• RescEU mechanism activated during destructive wildfire fire on Evia island


# Revenues for the first seven months of the year have exceeded targets, recording a surplus of EUR 1.78 billion against a target of primary deficit of EUR 803 million, according to provisional budget execution data. Net budget revenues in January-July 2019 were at EUR 28.605 billion, or 8.1 percent higher than the target of EUR 26.455 billion. Data released by the Treasury for January-July showed that the state budget recorded a deficit of EUR 1,851 million against a deficit target of EUR 4,628 million included in the 2019 draft budget report.

Prime Minister Kyriakos Mitsotaks will kick off a series of trips to Paris, Berlin and Amsterdam to discuss Greece’s post-bailout economy with a view to make the case for the reduction of primary surplus targets of 3.5-percent up to 2022. Mitsotakis will first head to Paris on Thursday for talks with French President Emmanuel Macron before meeting Angela Merkel in Berlin on August 29. He will wrap up his tour in the Hague on September 2 where he will meet Dutch Prime Minister Mark Rutte – just a few days before the Thessaloniki International Fair on September 7 where he will outline his government’s reform platform. Before PM’s trips, the government will have probably tabled a bill in Parliament for the full lifting of capital controls.

With regard to Greece’s post bailout economy, the government is reportedly working on several scenarios, with a particular emphasis on two of them. The first concerns changing the way Greece’s public debt is serviced. The next debt sustainability analysis is expected by the ESM when the request for the early repayment of the IMF loans is formally filed. But a change in debt servicing does not necessarily mean automatic and nominal reduction of targets. The second scenario concerns the use ANFAs and SMPs returns in the public investment program. This was included in the July 2018 agreement, however it is not clear whether any additional mature projects are available to be funded by Greek and / or European funds. Meanwhile, the Development Ministry will seek midweek to accelerate the implementation of co-financed programs. According to this plan, relevant agencies will have submitted by September 4 their payment estimate proposals and spending forecasts for 2020-2023.

A three-day fire that ripped through central parts of the island of Evia in central Greece last week turned around 28,000 hectares (61,190 acres) of forest land into ash, including one of Greece’s 19 Natura 2000 nature reserves. The blaze, which authorities described as an ecological disaster, led to the evacuation, as a precaution, of four villages and prompted Greece to ask for the assistance of its EU partners via the activation of the rescEU mechanism. EU Commissioner for Humanitarian Aid and Crisis Management Christos Stylianides visited Greece pledging the EU’s solidarity. No injuries or deaths were reported.



On Our Radar: Tourists enlisted in the fight against tax evasion
The fight against tax evasion will also rely on the input of tourists as part of the campaign launched by Greece’s Independent Authority for Public Revenue. As part of the “Apodixi (receipt) Please” initiative, tourists are encouraged to demand receipts during transactions. To this end a website has been launched while posters have been put up at airports informing tourists that they have a right not to pay if they are not issued with a receipt. The initiative was launched as inspections in June revealed that a large number of Greek businesses, especially in areas popular with tourists, failed to issue receipts.