Athens Digest 26.08.2019 [weekly edition]

• Macron welcomes Mitsotakis in Paris with migration, the environment, Cyprus on the agenda. Next stop Berlin

• Spokesman says 2019 surplus targets are feasible

• Moody’s gives B1 rating citing ‘moderate’ economic strength

• BoG: Current account deficit shrinks in first half

• Draft legislation for general data protection regulation published

• Ministry to create team tasked with monitoring national health system doctors

# PM Kyriakos Mitsotakis has begun a series of trips to European capitals, making his first stop in Paris last Thursday for talks with French President Emmanuel Macron who insisted that Greece has a vital role to play in Europe. The two men discussed the enhancement of defense cooperation as well as Turkey’s recent activities in the East Med, with Macron saying that France will not tolerate Ankara’s violations of Cyprus’ territorial waters. “The EU and France will not show any weakness in this respect,” he said, noting the need for solidarity to deal with a “fragmented geopolitical environment.” Regarding migration, both decried the refusal of EU countries to share the burden, stressing the need for European solidarity to face common challenges, which also include climate change and natural disasters. Mitsotakis lauded Macron’s efforts to tackle climate change, saying everyone must work together for the “ambitious goals to turn Europe into a truly green continent and a pioneer in innovation in the issues of energy transition.”

# No public statements were made regarding the government’s aim to reduce its primary surplus targets. However, reportedly, aides to the PM in Athens, who were privy to the details of his meeting with Macron, claimed that France will give its support to the Greek request where it should at the appropriate time. Mitsotakis’s next stop will be in Berlin on Thursday for talks with Chancellor Angela Merkel

# At the same time, Government Spokesman Stelios Petsas told Open TV that Greece will meet the 2019 primary surplus target of 3,5 percent of the GDP despite the doubts expressed by the EC and the Bank of Greece. “We are committed to achieving this goal, we believe it is feasible,” he said, adding that the draft budget for 2020 must be submitted on the first Monday of October, in accordance with the Constitution. He stressed that it would be inappropriate for Greece to unilaterally announce a target reduction in 2020 without providing a plan to justify it. “The target will be achieved with a plan. You implement the plan, you get credibility, and then, after 2020, you decide on smaller surpluses,” he said, adding that the PM, Greek President and Finance Minister Staikouras have raised the issue to Greece’s partners.

# Moody’s said its B1 Stable rating for Greece – four levels below investment grade – reflects the country’s “moderate” economic power and its higher living standards compared to other countries with the same rating. Greece’s growth prospects, it said, are uncertain given its low birth rate, its low investments and savings.

# Despite the deficit of the balance of goods, Greece’s current account deficit shrunk in the first six months of the year, reflecting a rise in the services surplus and an improvement in the primary and the secondary income accounts According to data published by the Bank of Greece, the current account balance recorded a deficit of EUR 3.9 billion, which was down EUR 759 million year-on-year. In June,  the current account showed a surplus of EUR 874 million, compared to a deficit of EUR8.9 million year-on-year. This was attributed to improvements in the balance of goods and services and the primary income accounts. On the other hand, the secondary income account deteriorated slightly.

# The Justice Ministry belatedly published on August 12 draft legislation for the implementation of the General Data Protection Regulation (GDPR) which requires businesses to protect the privacy of EU citizens and personal data during transactions within the EU. Although the regulation has already taken effect in Greece, as in all EU member states since 2018, Athens had not drafted the necessary legislation to specify how certain provisions of the GDPR will apply in the country. The GDPR contains several derogations whereby EU members are allowed to exercise a degree of discretion or flexibility.

# The Health Ministry is reportedly planning to create a team within Healthcare Service Provision Organization (EOPYY) tasked with monitoring the clinical and prescribing behaviour of physicians contracted to the organisation, according to reports. The move comes as healthcare expenditure went through the roof in H1, exceeding the fixed budget and leading to huge increases in clawback and rebates.

On Our Radar: Gov’t nominates new president of competition authority
The government last week nominated Ioannis Lianos, a professor of Competition Law and Public Policy at University College in London, to head Greece Competition Commission. He will replace Vassiliki Thanou who was removed from her post earlier this month, along with four other commission members, after the government introduced a provision included in a multi-bill stipulating that persons who have served in political offices cannot be appointed to the Competition Committee for five years from the moment they leave office. Thanou had served as a legal adviser in the office of former Premier Alexis Tsipras.