Athens Digest 17.09.2019

• Athens officials upbeat as technical teams arrive

Revenue data buoys government but budget worries linger

Stournaras says Lagarde unlikely to shift ECB policy

Taking Turkey to task with Trump?

# Members of creditor-institution technical teams have begun talks in Athens to prepare for an inspection next week headed by lead representatives. At the same time, Theodoros Skylakakis, the deputy finance minister, expressed government optimism at a presentation of January-August budget data showing tax revenues at EUR 468 million above the 8-month target. The government, meanwhile, formally requested ESM approval for the early repayment of a batch of IMF loans, an initiative that both institutions have publicly supported.

# An official at the Finance Ministry, meanwhile, says the government is set to post fiscal space worth EUR 0.5 billion in 2019. October data, the official said, could help Greece overcome persisting uncertainties  _ but leave final decisions pending for a later date. The list of uncertainties includes the size of a budget target safety margin, and details of a new tax and social security arrears installment scheme, as well as the expected level of participation and resulting fiscal impact. A question mark also remains over the expected level of VAT revenues and extraordinary budget expenses.

# Christine Largarde is unlikely to shift policy away from major decisions taken by Mario Draghi when she succeeds him as ECB president, according to Yannis Stournaras. “There are strong monetary, economic, and financial arguments suggesting that the new ECB President, Christine Lagarde, will more or less continue along the same lines,” the Bank of Greece governor told Bloomberg in an interview. Stournaras also backed Draghi’s latest stimulus initiative, arguing that the benefits outweigh the disadvantages, expressing concern at the prospect of a no-deal Brexit and the impact of global trade disagreements.

On our Radar: Trump Meeting on Cards
According to reports, Prime Minister Mitsotakis is set to meet US President Donald Trump at the United Nations General Assembly on September 24 for talks likely to focus on Turkey. Stelios Petsas, the Greek government spokesman, said Athens was seeking to highlight Turkey’s ‘interventionism” _ referring to Turkey’s internationally-condemned drilling activity off the coast of northern Cyprus. Foreign Minister Nikos Dendias reiterated Greek concerns at a meeting in Berlin with German counterpart Heiko Maas. “For negotiations to be productive there must be a de-escalation (of tension),” he said. “I regret to say that Turkey is not helping.”