Athens Digest 08.10.2019

• Greece reopens March bond as yields tumble

Government makes budget debut with optimistic growth forecast

Turkey’s drilling plans rattle Athens

Hellenikon: Aegean embraces mega-project

Greece has announced it will reopen 10-year bond offer set in March that would take advantage of tumbling yields. The government said it has appointed BNP Paribas, Citi, Goldman Sachs, HSBC, and JPMorgan as joint lead managers for the sale. Greece issued a 10-year bond under the previous government in March that fetched a yield of 3.9 percent. But rates have since continued to fall, reaching 1.42 percent yesterday.

The conservative government has submitted its first budget to parliament with an optimistic growth forecast of 2.8 percent of GDP in 2020, and a pledge to maintain a 3.56 percent primary surplus. The 52-page draft (here in Greek) includes a growth forecast of 2.0 percent for this year. The surplus figure is based on the high growth rate and a surge in investment by 13.4 percent _ forecasts seen as demanding but achievable by the Hellenic Fiscal Council. The government is also seeking EUR 844 million in additional revenue through tax reforms that include tougher controls on short-term vacation rentals. Greeks will also have to spend more using electronic transactions, the minimum now set at 30 percent of the total, to “build” a tax threshold.

Nikos Dendias, the Greek foreign minister, traveled to Cyprus to renew his condemnation of Turkey’s drilling activity off the island’s north coast, adding that he expected the EU to respond to the escalating crisis. “Fortunately, gunboat diplomacy is fortunately gone forever. It belongs in the 19th century,” Dendias said. “The militarisation and artificial escalation of an already tense situation is the conduct of a troublemaker entrenched in the impasses that have resulted from its own poor choices. These are not the choices of a modern, European, democratic rule of law.” Dendias flew to Cyprus after his meetings in Athens with visiting U.S. Secretary of State Mike Pompeo who was outspoken in his criticism of Turkey’s drilling..

Aegean Airlines has announced investment plans worth EUR 20 million in Lamda Development’s Hellenikon development project, adding that it would promote the venture on its flights. “Aegean’s brand, as the Official Hellinikon Project Air Carrier, will become an intrinsic part of Greece’s most transformative development project which is expected to positively impact the Athens tourism sector for the years to come,” the company said. The airline “will proceed with a “vote of confidence” investment by acquiring Treasury Shares amounting to 1.66 percent of listed Lamda Development’s share capital. Furthermore, Aegean intends to participate in the upcoming capital increase of Lamda by exercising the rights of the acquired shares.”

On our Radar: More islands join transfer programme 
Amid growing concerns over Syria, authorities here have accelerated transfers of migrants and refugees to the mainland from the islands _ with the effort now including all five islands where geographical restrictions remain in effect. More than 500 asylum seekers have been arriving each day since the programme was ramped up at the weekend to move migrants out of camps in Levos, Chios, Samos, Leros, and Kos. Giorgos Koumoutsakos, the alternate minister for migration, said the migrants would be taken to small camps being set up across the Greek mainland.