Athens Digest 11.10.2019

• NPLs: Hercules asset plan passes EU health test 

Mitsotakis says surplus could be used to help low-income households

Unemployment dips below 17 percent

Greece, Bulgaria finalise pipeline deal

Immigration: NATO chief backs Aegean patrol boost

The European Commission says Greek plans to slash non-performing loans do not violate EU competition rules. The so-called Hercules asset protection scheme did not unfairly involve state aid, according to a Commission decision. “I welcome that with the Greek government we have found a market conform solution to tackle the stock of non-performing loans weighing on the balance sheets of Greek banks,” Commissioner Margrethe Vestager said. “The scheme we approved today is another good example of how member states can help banks clean up their balance sheets without granting aid or distorting competition.”

Prime Minister Mitsotakis says a 2019 surplus could be used to provide additional help for low-income households. He told the Athens Democracy Forum that a shift in fiscal policy after the July election had paid off. “We’ve said very clearly that obviously we will meet and possibly exceed our fiscal target for 2019. That was not a given when we took over. When we took over there was a fiscal gap. Now, if anything, there will be an additional surplus and we will contemplate how we will use it if there is an additional fiscal surplus by December. It will be used again to support the weakest.” He renewed a pledge to start negotiations with lenders next year to lower primary surplus targets after 2020. “They don’t make any economic sense. They were put in place at a time when interest rates were higher,” he said.

The unemployment rate has dipped below 17 percent in July after nearly 60,000 jobs were added over the year. The Greek Statistical Authority, Elstat, said the seasonally adjusted unemployment rate in July 2019 was 16.9 percent compared to 19.1 percent a year earlier and 17.1 percent in June 2019. Youth unemployment (under 25) was at 32.9 percent, edging downwards from just over 50 percent five years ago. Elstat also released inflation figures: The Consumer Price Index in September decreased by 0.1 percent from September 2018. In September 2018, the annual rate of change of the CPI was 1.1 percent.

Greece and Bulgaria have finalised a bilateral agreement to build a 182-kilometer connector pipeline that would link up with the Trans Adriatic Pipeline and is aimed at boosting energy diversity across the region. The EUR 250 million agreement was signed in Sofia by Energy Ministers Kostis Hatzidakis of Greece and Temenuzhka Petkova of Bulgaria. The Komotini-Stara Zagora pipeline is due to be ready in 18 months and operational by mid-2021. Separately, Greece’s Energy Ministry is reportedly close to concluding plans for the commercial exploitation of the South Kavala underground gas storage facility _ a priority for the government so that Greece would not miss an EU financing timetable.

On our Radar: NATO boost in Aegean? 
NATO Secretary-General Jens Stoltenberg says he has responded to a Greek request and called on alliance members to provide more ships to patrol the Aegean Sea and help fight immigrant traffickers. Stoltenberg who met in Athens with PM Mitsotakis and his ministers of defence and foreign affairs, and made no direct criticism of Turkey’s military offensive in Syria. “I have stated that I count on Turkey to show restraint and to ensure that their actions in northern Syria are measured and proportionate and avoid even more human suffering,” he told a joint news conference. Mitsotakis said it was NATO’s duty to press for a ceasefire in northern Syria and prevent “a violent change in the demographic makeup of the region.”