Greek central bank governor repeats call for post-bailout safety net

by Kerin Hope

Financial Times
February 26, 2018

Greece’s central bank governor has again urged the government to seek a precautionary credit line after the current €86bn bailout ends in August to reduce borrowing costs on international financial markets.

Yannis Stournaras told the annual meeting of shareholders of the Bank of Greece that “such an arrangement would provide secure access to financing for Greek banks and the public sector after the [bailout] programme ends.”

“The possibility of making use of a preventive support programme shouldn’t be over-dramatised . . . these European mechanisms were created to be used when they are needed,” Mr Stournaras added.

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Greece wraps up port privatisation after three years

by Kerin Hope

Financial Times
February 23, 2018

Greece’s parliament has ratified the €1.1bn privatisation of the northern Greek port of Thessaloniki, with a sale to to a consortium of German, French and Russian-Greek companies.

The disposal of OLTH, operator of the port, takes the form of a combined share sale and concession deal, and was agreed under terms of Greece’s international bailout programme. It took three years to complete.

The Hellenic Republic Asset Development Fund, the country’s privatisation agency, is now moving ahead with the disposal of the Alexandroupolis port in northeastern Greece and nine other regional ports that are 100 per cent state-owned.

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A Modern Greek Tragedy

by Adam Tooze

New York Review of Books
March 8, 2018

On January 25, 2015, after five years of debt crisis and economic and social decline that left half the country’s young people unemployed, the Greek electorate handed power to the most radical coalition to govern a European country in decades. Under the leadership of the youthful Alexis Tsipras, the Coalition of the Radical Left (Syriza) won 36.3 percent of the vote, qualifying it for the fifty-seat bonus awarded to the party with a plurality. To the horror of bien pensant opinion in Berlin and Paris, it chose as its partner in government a right-wing nationalist party, the Independent Greeks (ANEL).

In Greece the left was jubilant. The memory of the heroic anti-Nazi resistance, the civil war, and the students who rose up against the dictatorship of the colonels in the 1970s was vindicated. Syriza was the toast of the radical chic from Berlin to Brooklyn. Centrists were bemused. Had such left-wing enthusiasm not had its day? NATO hawks were up in arms. With Ukraine and Syria in mind, columnists fretted over Syriza’s possible ties to Moscow. The oligarchs who controlled much of the Greek media were on the warpath. Tens of billions of euros fled Greek bank accounts.

Meanwhile, Greece’s new finance minister, the ferociously charismatic and thoroughly Anglophone Yanis Varoufakis, became a global celebrity. His glamorous lifestyle, motorcycle, and tight T-shirts delighted the media. In Brussels, European officials still fume about his disruptive impact on their staid proceedings. In Greece he would face charges of treason. The appearance this fall of Varoufakis’s memoir, Adults in the Room, stirs old memories. The legendary Greek-French filmmaker Costa-Gavras has pronounced himself so “enraged by the violence and indifference of the Eurogroup members [i.e., the eurozone finance ministers], especially the German side, to the…unsustainable situation in which the Greek people live,” that he will turn Varoufakis’s exposé into a film.

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Greek parliament backs Novartis probe

by Kerin Hope

Financial Times
February 22, 2018

Greece’s parliament has voted to investigate allegations that 10 senior politicians, including two former prime ministers, the country’s EU commissioner and the governor of the central bank, accepted bribes from the Swiss drugmaker Novartis.

Those accused strongly denied wrongdoing in formal speeches during a heated debate that lasted more than 20 hours.

Several argued they had been targeted as political enemies of the ruling leftwing Syriza party, which brought the case to parliament.

Alexis Tsipras, the prime minister, said the vote marked a “break with the past system of arrogance, greed and no transparency.”

A special parliamentary committee will carry out the probe.

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Novartis Bribery Case in Greece Threatens to Bolster Populists

by Eleni Chrepa

Bloomberg
February 21, 2018

Greek lawmakers begin discussions Wednesday on the alleged role of former senior government officials in a Novartis AG bribery case, which is part of a drug-overpricing scandal that’s estimated to have cost the country about 23 billion euros ($28.7 billion).

The case has snared 10 politicians, including former Finance Minister and current Bank of Greece Governor and European Central Bank Governing Council member Yannis Stournaras. All have denied wrongdoing. The Greek parliamentary hearing comes after another ECB Governing Council member, Ilmars Rimsevics of Latvia, was detained over the weekend by the country’s anti-corruption agency on suspicion of securing bribes. He has denied the charges and refused to step down.

The Novartis case in Greece is part of a global pharmaceuticals industry scandal and investigates the Swiss drug-maker’s part in allegedly inflating drug and vaccine prices. The bribery investigation, which has also drawn in two former prime ministers and a European Union commissioner, is roiling the political landscape in Greece as the country prepares for an exit from its bailout program. The case threatens to deepen the public’s disillusionment with established political parties and bolster groups on the extreme, observers said.

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Your Next Truffle May Be Coming From Greece

by Larissa Zimberoff

Bloomberg
February 20, 2018

So you’re dining at a fancy restaurant and choose to splurge on some truffles to top off your repast. The server steps up and presents the vaguely ugly tuber. As the pungent slices rain down on your main course, the waiter announces that these truffles didn’t come from Italy, the traditional provenance of this decadent garnish. They hail from Greece.

Don’t be shocked—be glad. Italians have successfully positioned their product as the most luxurious under the forest floor. But white Alba truffles—tuber magnatum pico—also grow magnificently well in Greece. Even Aristotle mentions them in his writings, but they never made it into the local cuisine. Unlike Italy’s truffles, which have been dug up and eaten for centuries, Greece’s truffles have remained largely undisturbed. At least they did until the Athens-based culinary exporter Eklekto saw their potential for the U.S. market.

But there’s an additional reason to embrace Greek truffles. Usually, countless middlemen touch an Italian truffle before it makes it to market, increasing the consumer’s chances of getting a counterfeit version. Eklekto partners Peter Weltman and George Athanas say they work only with a small group of Greek foragers and know exactly where the product is from. Apart from the forager working with his trusty dog, Weltman and Athanas are the only people that touch the truffles before export, the company says.

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Greece seeks to calm Brussels’ bailout fears

by Kerin Hope

Financial Times
February 18, 2018

Greece’s finance minister has said his country will not need to be subject to tight monitoring once its bailout programme ends in August, insisting the concerns of EU partners are misplaced as it can be trusted to manage its finances safely.

Euclid Tsakalotos says that Greece’s new economic growth plan, to be unveiled in April, will assuage fears in Brussels and Washington that the leftwing Syriza government will roll back unpopular economic reforms as soon as bailout constraints are lifted.

“We want as ‘clean’ an exit as possible [from the bailout],” Mr Tsakalotos said in an interview with the Financial Times, using Syriza’s term for drawing a line under eight years of austerity that has seen Greece’s output shrink by about one-quarter and an exodus of some 450,000 young skilled workers to other EU countries.

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These Are the World’s Most Miserable Economies

by Michelle Jamrisko & Catarina Saraiva

Bloomberg
February 15, 2018

Rising prices are more of a threat to the global economy this year than joblessness, according to Bloomberg’s Misery Index, which sums inflation and unemployment outlooks for 66 economies.

Venezuela marks its fourth year as the world’s most miserable economy, with a score that’s more than three times what it was in 2017. Thailand again claimed “least miserable” status, though the nation’s unique way of calculating unemployment makes No. 2 Singapore worth noting. Elsewhere, Mexico looks to make big strides this year as inflation becomes more manageable, while Romania absorbs more misery for the opposite reason.

The Bloomberg Misery Index relies on the age-old concept that low inflation and unemployment generally illustrate how good an economy’s residents should feel. Sometimes, of course, a low tally can be misleading in either category: Persistently low prices can be a sign of poor demand, and too-low joblessness shackles workers who want to switch to better jobs, for instance.

The results largely signal a global economic outlook that remains bright overall: Economists are penciling in 3.7 percent year-on-year growth for the world in 2018, matching last year’s pace that was the best since 2011, according to the Bloomberg survey median.

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Greece’s ruling party backs graft probe into top politicians

by Kerin Hope

Financial Times
February 12, 2018

Lawmakers from Greece’s ruling leftwing Syriza party have backed a call by prime minister Alexis Tsipras for a parliamentary probe into allegations that 10 top politicians accepted bribes from the Swiss pharmaceuticals company Novartis.

Two former prime ministers, the central bank governor and a former health minister now serving as the EU’s commissioner for home affairs, were among those named in a report by Greece’s anti-corruption prosecutor on corruption in the state health service.

Six other former ministers and undersecretaries of health are also accused of taking bribes from Novartis between 2001 and 2015 in return for illegally raising drug prices and giving the Swiss company privileged access to the Greek market. All those accused strongly denied wrongdoing.

“Our only aim is to reveal the truth — it is others who resort to “fake news” . . . We have a responsibility to stop the squandering of public money,” Mr Tsipras told Syriza lawmakers on Monday.

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Greece wraps up seven-year bond sale, raises €3bn

by Kerin Hope

Financial Times
February 8, 2018

Greece has wrapped up the sale of a seven-year bond after a 48-hour delay blamed on international market turbulence, raising €3bn at a yield of 3.5 per cent.

The issue marked the first time since 2014 that the country has raised new money. A five-year bond issue last July raised €3bn, about half of which involved swapping existing debt for longer-dated paper.

“We proved today . . . that not only can we tap the markets and raise new money but we can do that in circumstances that are not ideal,” said Euclid Tsakalotos, the finance minister.

Demand for the paper exceeded €6bn, with longer-term investors showing interest as well as hedge funds, according to bankers in Athens.

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Greece delays bond sale as markets reel

by Kerin Hope & Kate Allen

Financial Times
February 6, 2018

Greece has temporarily delayed its plan to tap the bond markets for the first time since last summer, as bond investors mull this week’s market turbulence.

Greece is seeking to raise seven-year debt and is aiming for a yield of 3.33 to 3.4 per cent, according to people familiar with its plans.

Those familiar with the deal initially expected bookbuilding to begin as early as today. “It was all due to be wrapped in one day — Tuesday,” one source said.

A banker working on the deal who was not authorised to speak to the press said: “Clearly nothing is happening today. Whether we wait a day or a few days — nothing has been decided.”

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Cyprus president Anastasiades defeats leftist challenger

by Helena Smith

Guardian
February 4, 2018

Greek Cypriots have re-elected Nicos Anastasiades as their eighth president in what is seen as a ringing endorsement of his stable leadership over the past five years.

The 71-year-old conservative won a second five-year term on Sunday with 56% of the vote. His opponent, the leftist-backed independent Stavros Malas, took 44%.

There were scenes of jubilation in Nicosia as news of the incumbent’s 12-point lead reached the campaign headquarters of Anastasiades’ Democratic Rally party (Dysi). Supporters poured on to the streets holding Cypriot, Greek and party flags, chanting slogans and honking horns. “Victory is a beautiful thing,” said Christos Papamichael, a Dysi activist.

Addressing followers soon after, the leader vowed to reactivate peace talks aimed at reconciling Cyprus’ Greek and Turkish communities.

“The biggest challenge we face is reunifying our country. I will continue to work with the same determination in a bid to achieve our common goal – ending foreign occupation and reunifying our state. There are no winners or losers, just Cyprus.”

Anastasiades had long been the frontrunner of a lacklustre electoral campaign marked by voter abstention.

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Greek protesters take to streets in battle over Macedonia’s name

by Kerin Hope

Financial Times
February 4, 2018

Hundreds of thousands of demonstrators gathered outside the Greek parliament on Sunday to protest against the leftwing Syriza government’s attempt to settle a decades-long dispute with Greece’s northern neighbour over rival claims to the name Macedonia.

Protesters waved Greek flags and shouted “Hands off Macedonia” as the 92-year-old composer Mikis Theodorakis, Greece’s best-known cultural figure, made a rare public appearance to appeal for national unity to counter what he described as a “threat to our territorial integrity”.

“There is one Macedonia and it is, was and always will be Greek,” said the former leftwing activist and culture minister, who has become an outspoken nationalist.

Macedonia and Greece have been at loggerheads for almost 30 years over the name issue, since Macedonia declared independence in 1991 from the collapsing Yugoslav federation. Athens raised objections within weeks, claiming the name implied a territorial claim on Greece’s own region of Macedonia.

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Athens ventures into hostile territory over Macedonia name

by Kerin Hope

Financial Times
February 2, 2018

Against the backdrop of a warrior-like statue of Alexander the Great on horseback, retired general Frangoulis Frangos gave a crowd of more than 300,000 in Thessaloniki, the northern Greek capital, the message they had come to hear.

“Macedonia is only Greek and will remain so,” he declared.

Mr Frangos, a burly former army chief of staff, is rallying popular opposition to a new effort by Alexis Tsipras, Greece’s prime minister, to solve one of the country’s most intractable foreign policy disputes: what to call Greece’s northern neighbour, which is officially known as FYROM (Former Yugoslav Republic of Macedonia).

Macedonia and Greece have been at loggerheads for almost 30 years over the name issue, since Macedonia declared independence in 1990 from the collapsing Yugoslav federation. Athens raised objections within weeks, claiming the name implied a territorial claim on Greece’s own region of Macedonia.

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The crisis in Greece: The semi-rentier state hypothesis

by Asteris Huliaras & Dimitris Sotiropoulos

London School of Economics & Political Science
Hellenic Observatory
Discusion Papers on Greece and Southeast Europe
GreeSE Papers # 120
January 2018

This article offers an alternative explanation of the ‘Greek crisis’ by using the rentier-state theory. Past explanations referred to domestic pitfalls of the Greek economic development or to external constraints such as the incomplete architecture of the Eurozone. Without rejecting these interpretations, we offer a complementary interpretation underlining the facility and large scale with which external funds have flowed into Greece. This pattern was reminiscent of cases of resource-rich countries of the developing world and have created a semi-rentier state. External resources have spread a ‘rentier mentality’ among state actors and a ‘get-rich-quick mentality’ among business entrepreneurs and interest groups. Political decisions were characterised by risk-averse attitudes, while private actors spent their energy in seeking political protection rather than in initiating new enterprises. Three factors that played a significant role in shaping the Greek crisis and continue to plague Greece are foreign loans, EU funds and tax evasion.

Read the Paper (PDF)