Athens Digest 16.09.2019

• Regling hails early IMF repayment but stresses that primary surplus targets could be discussed only under conditions next year

Institutions returning to Athens within context of 4th surveillance report

MinFin Staikouras insists Greece on course to meet fiscal targets in 2019, 2020

Migrant flows spike since the beginning of September


# ESM Managing Director Klaus Regling indicated at Friday’s informal meeting of Eurozone finance ministers in Helsinki that Greece’s primary surplus targets after 2020 could be reviewed next year if it surpasses its growth targets and if interest rates are in the “long run lower.” However, he sought to keep expectations low, noting that “growth at the moment or the first half of this year, was less than what we had assumed when Greece left the programme.” He also hailed Greece’s intention to proceed with an early repayment of a chunk of high-interest IMF loans. “My feeling is that there is a lot of sympathy for that – certainly from my side,” he said, adding that it will “improve debt sustainability of Greece because the expensive part will be prepaid.” Greece is expected to send an official request for the early repayment today.

# For his part, Benoit Coeure, member of the ECB’s executive board, welcomed the government’s commitment to reforms but noted that the “devil is in the details.” “We welcome the continued improvement of the financial environment in Greece both in terms of the markets and the liquidity of the banking sector,” he said during Friday’s press conference in Helsinki, adding that the government must build on the progress made since 2015 and to “deliver concrete actions that are needed for NPL reductions.” “This includes further work on electronic auctions and improvements regarding state loan guarantees and the implementation of the action plan to improve the effectiveness of the judiciary,” he added.

# Technical teams return to Athens today ahead of next week’s arrival of the heads of the institutions within the context of the 4th enhanced surveillance report on Greece. According to remarks by Eurogroup President Mario Centeno at Friday’s press conference in Helsinki, Greece will be discussed again at the December meeting of Eurozone finance ministers when “we look at the fourth enhanced surveillance report.” The most pressing issues concerning the report are the implementation of the budgets for 2019 and 2020 and the country’s commitment to agreed post programme reforms.

# Meanwhile Finance Minister Christos Staikouras insisted in an interview to the Efsyn newspaper at the weekend that even though the previous SYRIZA government created a fiscal deficit for 2019, the “execution of the budget over the last two months and estimates for the rest of the year confirm that this year’s high fiscal target will be achieved.” Moreover, he added that improving economic climate will allow the necessary fiscal space for “further tax rate reductions in 2020”

# In the latest spike in migrant flows into Greece, almost 3,500 people crossed into the northern Aegean islands since the beginning of September, according to the latest data released by Northern Aegean Police Directorate. More specifically, the island of Lesvos received 2,078 refugees and migrants, while 589 arrived on Chios and 802 on Samos 802. A total of 5,813 people arrived on the same islands in August – 3,866 in Lesvos, 685 in Chios and 1,262 in Samos.



On Our Radar: High school student grades a source of grave concern
A recent report has shown that a significant number of secondary school students are at risk of becoming functional illiterate – lacking skills to manage daily living and employment tasks later in life. In its annual report for 2019, the Authority for Quality Assurance in Primary and Secondary Education (ADIPPDE) said that 11th graders, in particular, at regular and technical public high schools, performed well below average. Indicatively, the report showed that 7.1 percent of 11th graders in public high schools in the 2017-18 academic year failed in the subject of Modern Greek, while 48.4 percent failed physics, as did 44.2 percent and 38.9 percent in geometry and algebra respectively. The situation at technical high schools appeared even worse, with one in five 11th graders (20.4 percent) failing to receive an overall passing grade.