Athens Digest 07.10.2019

• Turkey cannot be allowed to proceed with illegal drillings off Cyprus and hold Europe hostage, Pompeo says

Washington, Athens strengthen military cooperation with extension of defense deal

Moscovisi confident fiscal gap in 2020 budget will be closed

Gov’t to reform social security after top court rules that key elements of current law are unconstitutional

# Referring to Turkey’s drilling activities off the coast of Cyprus, US Secretary of State Mike Pompeo stressed during his visit to Athens at the weekend “that no country can hold Europe hostage” and that Washington wants to make sure that “rules govern international exploration in the Mediterranean Sea’s energy resources.” Pompeo’s visit was the last leg of his tour of the region which did not include a stop in Ankara as was the case with his predecessors. “We cannot let Turkey proceed with illegal drillings,” Pompeo said after Ankara’s announced it will prospect for hydrocarbons in plot 7 of Cyprus’ EEZ which has already been licensed to Total and ENI. The US, he added, “continues to take diplomatic actions to make sure that we do, as we do always, ensure that lawful activity takes place.”

# In another sign of strengthening Greek-American ties, Greek Foreign Minister Nikos Dendias and visiting US Secretary of State Mike Pompeo on Saturday signed the Protocol of Amendment to the Mutual Defense Cooperation Agreement (MDCA). The new agreement allows the two countries to expand bilateral activities at the air bases of Larissa, Stefanovikio in central Greece, and the port of Alexandroupoli in northern Greece, and to sustain increased naval support activity at Souda Bay base on the island of Crete. Pompeo cited Greece’s geostrategic significance in the region as a pillar of stability, but clarified that the deal is not connected to the tensions in US-Turkish relations. In a statement on Friday, the US State Department said relations between the two countries are at a “historic high point.”

# Outgoing Economic Affair Commissioner Pierre Moscovisi has expressed optimism that the fiscal gap in Greece’s budget for 2020 will be closed, but noted that the target of a 3.5 primary budget surplus for that year will not change. Speaking in Athens on Friday, the EU official said that “substantial progress has been made and I am confident that the fiscal gap there is today will be closed.” According to Greek sources the fiscal gap has been reduced to EUR 500-600 mln from 1.2 bln. The draft budget will be submitted to Parliament today and to the Commission on October 15.

# The government will have to reform social security legislation within six months after the Council of State, the country’s highest legal body, deemed on Friday that crucial tenets of the so-called Katrougalos law of 2016 are unconstitutional, as there is no proportionality of contributions and pensions.. The verdict also impacts the calculation of auxiliary pensions as the legislation was drafted without any prior actuarial studies. The fiscal consequences of the decision have yet to be determined. Moreover, the decision also puts a freeze on retroactive claims but leaves an one-year grey area (2015-2016).

On Our Radar: German interior minister stresses need to breathe new life into EU-Turkey migrant agreement
Amid the spike in migrant flows from Turkey, German Interior Minister Horst Seehofer insisted that “new life” must be breathed into the deal between Brussels and Ankara in 2016 to stem arrivals to Europe. After wrapping up visits to Greece and Turkey, Seehofer stressed – in an interview on Friday night with ZDF at the German embassy in Athens – the need for the distribution of refugees from Greece to other European states and for Greece to expedite asylum procedures. He repeated that solutions must be found on a European level.
A great challenge for the EU is to ensure that those migrants that are not entitled to asylum are returned directly back to their countries.