Athens Digest 27.09.2019

• Creditors leave, talks continue

Mitsotakis aims for 3 percent growth in 2020

Citi says Greece still faces ‘uphill’ path

Bank deposits up for sixth straight month

Piraeus Bank’s Hanjinicolaou welcomes improved business environment


# Creditor mission chiefs wrapped up talks in Athens, but talks between the two sides were set to continue ahead of October 15 submission of the draft budget plan. “The mission held productive discussions on the situation, progress made, and key challenges still facing the Greek economy and the policy priorities of the new administration,” a statement from the European institutions said. It noted that the next enhanced surveillance report on Greece would be released in the autumn. The fourth enhanced surveillance report will be issued this autumn. “Based on the completion of agreed commitments, the report could serve as a basis for the Eurogroup to decide on the transfer of SMP-ANFA income equivalent amounts and the cancellation of the step-up interest margin on certain EFSF loans,” the statement said.

# The prime minister has defended a growth strategy centered on tax reduction, arguing that the benefits of his government’s policies could push the annual growth rate up to 3 percent next year. In an interview with the Washington Post while on a trip to The United States, Kyriakos Mitsotakis was asked whether government money would be better spent on public investment and infrastructure programmes. He responded: “You could do that, and we’ll probably do both. But the question is: What is the biggest multiplier in terms of creating growth? Our hope is that our growth is going to be 3 percent in 2020 and that we can sustain this type of growth for the foreseeable future.”

# Despite the optimism surrounding Greece, Citibank has cautioned that the country still faces major challenges to its recovery that are likely to keep growth rates modest. Citi sees growth rates of 1.8 percent this year and 1.9 percent in 2020 _ slightly improved from its previous outlook _ but with a significant slowdown to 1.5 percent in 2021, 1.4 percent in 2022, and 1.3 percent in 2023. The benefits of improved political stability and reform commitment, it argued, would be capped by deteriorating international conditions and persisting weaknesses in the Greek economy that include its fast-ageing population.

# Bank deposits in the private sector have risen for a sixth consecutive month according to central bank data for August. Combined deposits for households and businesses reached EUR 139.72 billion, the Bank of Greece said. The June figure was EUR 138.64 billion.

# George Handjinicolaou, chairman of the board of directors at Piraeus Bank and the Athens Stock Exchange says Greece’s financial sector has moved into a “new era of stability and growth,” welcoming the country’s improved business environment. He was keynote speaker at a conference aimed at showcasing the Greek financial sector, held on the sidelines of the international Sibos 2019 conference in London. “The Greek Financial Sector has emerged from its challenges, and is moving steadily, confidently but also swiftly, into a new era of stability and growth, ready to finance the increasing attractive prospects of the Greek economy,” Handjinicolaou said. “Looking ahead, investments are expected to be a key driver for growth in the coming years as a more business-friendly environment has emerged”. The conference was held under the auspices of the Hellenic Bank Association and the Athens Exchange Group.



On our Radar: Exarchia 2.0? 
Municipal crews have begun an express cleanup of a corner of central Athens long avoided by authorities, Exarchia Square. Workers with pressure hoses and scouring brushes were joined by gardening crews for a three-day facelift of the square that for decades has been the centre of confrontation by anarchist groups against the police. The campaign by the City of Athens and new Mayor Kostas Bakoyannis is also aimed at reviving the area and its businesses, many of which had been struggling due to building occupations and squats in the area.