Athens Digest 06.09.2019

• Stournaras sees no fiscal gap for 2019

• Greece record second-highest VAT shortfall in EU

• U.S. Commerce Secretary Ross says Greece still burdened by taxes and regulation

• Giannis leads Greek rebound to face World Cup favourites USA


# Bank of Greece governor Yannis Stournaras argued that despite the threat to the primary surplus target from pre-election government spending, primary surplus target will be met. “The legislation of an expansionary fiscal package in May 2019 put at stake the attainment of the primary surplus target of 3.5% of GDP agreed in the context of the enhanced surveillance (…) Latest (August) cash fiscal data indicate, according to the Bank of Greece, that the 2019 fiscal target will be met. This outcome is driven by adjustment of expenditure as well as by revenue over-performance (mainly VAT) in the last two summer months,” he said in a speech at the Belgian Business Club.

# Stournaras added that Greece now stood to gain from the end of capital controls and record low bond yields. Those Improvements, he argued, “will pave the way for the inclusion (of Greek bonds) in the ECB’s Asset Purchase Programme. This, in turn, will further lower borrowing costs for the Greek economy, thereby boosting growth and improving debt sustainability. In such a benign scenario, higher growth rates than currently projected, that is a growth rate close to 3 percent, could be achieved.”

# Greece had the second-highest VAT shortfall in the European Union in 2017 with a 34 percent gap, according to European Commission figures. Romania had the largest VAT gap at 36 percent, followed by Greece and Lithuania at 25 percent. The smallest shortfalls _ the difference between expected and actual VAT collection _ were recorded in Sweden, Luxembourg, and Cyprus _ at just 1 percent. In total, the Commission said, EU countries lost a total of EUR 137 billion in VAT revenues in 2017.

U.S. Commerce Secretary Wilbur Ross says the United States could further increase trade with Greece if the country’s new government addresses persisting problems in the economy. “The current government has realised what Greece truly needs, lower taxation and reforms,” he told the press. “High taxes, regulatory burdens, limited credit availability, repeatedly delayed privatizations; If these barriers can be addressed, U.S. companies will invest here, hire local workers, and contribute positively to the Greek economy, spurring even stronger growth,” Ross also told the American Chamber of Commerce in Athens. “Last year, total trade in goods between the U.S. and Greece increased by 20 percent, or $470 million, to $2.8 billion. Our goods exports to Greece increased to $1.1 billion, while our imports from Greece increased to $1.7 billion.” Ross is visiting Greece and Turkey. In Athens, he met with Prime Minister Mitsotakis and Development Minister Adonis Georgiadis, and Minister of Digital Governance Kyriakos Pierrakakis.



On our Radar: Giannis v NBA
Giannis Antetokounmpo led Greece to the last 16 in the World Cup, with 24 points to beat New Zealand 103-97, setting up a highly anticipated game against Team USA. The often unfocused Greek team recovered from its loss to Brazil to beat back a challenge from the Tall Blacks in Nanjing. Currently the NBA’s most valuable player, Antetokounmpo is already on the mind of his American opponents, including teammates from the  Milwaukee Bucks like forward Khris Middleton and center Brook Lopez. “He’s going to want to tear our heads off,” Lopez said. “I wouldn’t expect anything otherwise.” The USA meets Greece in Shenzhen tomorrow.