Greece: Much Progress, but Action Needed to Address Crisis Legacies, Boost Inclusive Growth

International Monetary Fund
IMF Country Focus
July 31, 2018

Greece has successfully eliminated its extraordinarily high fiscal and current account deficits, and restored growth. It must now take action to address crisis legacies and boost inclusive growth, says the IMF in its annual health check of the country’s economy.

As the Fund publishes its annual report on the state of the Greek economy, IMF Country Focus sat down with Peter Dohlman, the country’s mission chief, to discuss the report’s overall findings, key recommendations that could help lift the country’s growth prospects and living standards, and the Fund’s future relationship with Greece.

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Athens told to stick to reforms or risk losing investment

by Jim Brunsden & Kerin Hope

Financial Times
July 31, 2018

Greece’s central bank governor has warned that any backsliding by the country on economic reforms could shatter fragile investor confidence, as Athens prepares to exit eight years of international bailout programmes next month.

Yannis Stournaras told the Financial Times that “markets are waiting” to see if Greece will stick to its commitment to implement additional measures after the formal bailout ends on August 20. He said it would be a mistake to assume that a debt relief deal agreed with the eurozone in June would be enough to reassure investors that Greek bonds were a sound investment.

“As soon as we are out on our own, the markets will take a tough approach. They want to see how we are going to behave after August 20,” he said.

“They [investors] will be monitoring every move by the government as far as economic policies are concerned. If they feel that we’re backtracking, they’ll be off. If they feel we’re honouring our commitments, they’ll give us a chance”.

His comments come as Greece prepares to live without handouts from international creditors and once again raise its own money from investors, closing an unprecedented period of economic intervention that began after it was frozen out of bond markets in 2010.

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The Fires in Greece

by Nikos Konstandaras

New York Times
July 27, 2018

Four days after the wildfire that raced down from the mountains, incinerating all before it, cars were once again tangled up in traffic jams in this seaside resort’s narrow streets. Search parties combed ruined homes for bodies; volunteers sought out injured and frightened pets. The nation was in mourning, shocked by the magnitude of the disaster, shaken by the stories of victims and the missing.

In a V-shaped bend where on Monday desperate residents and visitors found themselves trapped, unable to escape the heat that melted even the metal of their cars, vehicles carrying survivors who had returned to salvage some possessions, volunteers, journalists and the simply curious edged carefully past one another as they sought a way out of Mati. The only reason they did not run the risk of being burned alive was that pretty much anything in the vicinity that could burn had already burned — pine trees, houses, people, pets and cars — even a wooden umbrella on a beach where people had fled into the water. Black dust and liquefied aluminum lay on the road when the incinerated hulks were removed.

By Friday, the death toll had reached 87, with scores still missing. It was unclear how many of the bodies had been identified, a daunting task because of the intense heat most had been exposed to.

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As Greek Wildfire Closed In, a Desperate Dash Ended in Death

by Jason Horowitz

New York Times
July 24, 2018

They nearly reached the water.

As wind-fueled wildfires that killed at least 76 people in vacation areas outside Athens bore down on their seaside resort, 26 men, women and children gathered in the hope that they could find the narrow path leading to a small staircase down to the water.

The gated entrance stood only a dozen paces away, but with smoke blotting their vision and choking their lungs, they appear to have lost their way. Officials found their bodies the next day, Tuesday; several were still clinging to one another.

At sundown, an eyeglass case, a belt buckle, the carcasses of dogs and the shells of cellphones dotted the still-smoldering field where they fell. Amid the burned pine cones and the naked trees, leaning as if slammed by a nuclear wind, lay a large leather sandal and a small blue one with a Velcro strap.

All around were the discarded blue rubber gloves of the emergency workers who carried the bodies away.

Greece, a country that understands tragedy all too well, woke Tuesday morning to its worst one in a decade. In addition to those killed by smoke or fire, or who drowned in the sea while trying to flee, 187 people were hospitalized, more than 20 of them children. Ten people remained in serious condition, the government said Tuesday night.

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At least 74 killed by Greek forest fires

by Kerin Hope

Financial Times
July 25, 2018

The devastating forest fires that have swept through crowded resorts on the Greek coast near Athens have killed at least 74 people.

The blaze, fanned by strong winds, raged out of control for a second day in eastern Attica, where more than 700 people were evacuated overnight in small boats. The fire service has also asked people to evacuate the area around Kineta, west of Athens.

Almost 50 wild fires have broken out across Greece in the past two days, with 10 still burning on Tuesday — including blazes in Corinth, Crete, and in central and northern Greece — after a weekend heatwave sent temperatures above 40C.

The number of fatalities makes this the highest death toll from forest fires in recent times and it looks set to rise further after a fire service spokeswoman said about 100 people were missing. More than 170 people have been injured. In 2007 more than 60 people were killed when a blaze devastated the southern Peloponnese peninsula.

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Athens and Moscow’s Stunning Falling-Out

by Nikos Konstandaras

New York Times
July 23, 2018

For centuries, even when Athens was a bastion of the West during the Cold War, Greece and Russia have seen themselves as natural allies. Both are Christian Orthodox nations on Islam’s western frontiers; even as a NATO member, Greece tried to maintain channels of communication with the Soviet Union. Yet a sudden dispute over alleged Russian meddling in Greek affairs has escalated rapidly. This could have long-term consequences for Greek-Russian ties and for the Western Balkans.

This month, Athens informed Moscow that it was expelling two Russian diplomats and refusing entry to two others. Among the accusations: the four were trying to stoke opposition to a recent agreement signed by Greece and a northern neighbor, the Former Yugoslav Republic of Macedonia, ending a 27-year dispute over the latter’s name.

Ratification by both countries would open the way for a renamed the Republic of North Macedonia to join NATO and the European Union. Greek opponents of the deal object to their neighbors’ use of “Macedonia” in any form, saying this implies claims on the Greek province of the same name; Macedonian nationalists object to adding a qualifier to their country’s name.

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A Greek Bearing Grifts

by Alexander Clapp

American Interest
July 19, 2018

It is hard to understand how the Greek state works without grasping the power held by a small circle of industrialists and financiers in Athens. These are the oligarchs. Many inherited their fortunes or first accumulated them at sea; their fleets collectively comprise the largest merchant marine in the world. Then they moved into new spheres. Some went into construction. Others set up banks. Many own a line of hotels or collect blocs of real estate. Those with ships pay the minimal tax rate in Greece owing to legislation passed by the 1967-74 military junta that allows their capital to be assessed in vessel tonnage rather than profits. Sometimes tying their holdings through Cypriot or Liberian shell companies, oligarchs nevertheless stay based in Greece, where they compound additional advantages—bailouts courtesy of Greek taxpayers, lucrative state contracts—through blackmail.

With every new government that takes power in Athens, the oligarchs threaten to take away the jobs they provide and the cash they flush into the political system should any attempt be made to audit their assets or tax them more effectively. In the past three decades not a single major party in Greece has run for election without vowing to break the power of these men; not a single party has seriously attempted to do so once in office. What is more, oligarchs are able to control the narratives told about them because there hardly exists a newspaper, television channel, or magazine in Greece that is not owned by one of them. Their power is such that press outfits within—and outside—the country have many legal and financial incentives not to call them out by name.

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Russia’s Lavrov scraps Greek visit in row over Macedonia

by Kerin Hope

Financial Times
July 19, 2018

The Russian foreign minister, Sergei Lavrov, has called off a visit to Athens following the expulsion from Greece of two Russian diplomats accused of trying to step up nationalist protests against the country’s recent naming deal with Macedonia.

The Russian ambassador to Athens, Andrei Maslov, said on Thursday the timing of the trip was “no longer suitable,” according to the Tass news agency.

The leftwing Syriza-led government last month issued an invitation to Mr Lavrov to visit Greece in September.

Under Alexis Tsipras, the prime minister, Greece has maintained close ties with Russia. But a strong backlash against last month’s naming agreement has sent the government’s popularity plunging in opinion polls.

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Russia meddles in Greek town to push back the west

by Kerin Hope

Financial Times
July 14, 2018

The sleepy Aegean port of Alexandroupolis in northern Greece has become a new focus for Russian efforts to extend its influence in south-eastern Europe and thwart the enlargement of Nato and the EU.

The town is home to a small community of Russian citizens with Greek connections. Two Russian diplomats, expelled this week for activities that allegedly violated Greek law, were well known in the port, according to two people with knowledge of their activities.

The diplomats were accused of working with businesspeople to bribe local government officials, Orthodox clergymen, and members of cultural associations and far-right groups across the north of the country in order to fan a popular backlash against the naming agreement signed last month between the leaders of Greece and Macedonia.

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Evaluation of the Level of Corruption in Greece and the Impact on Quality of Government and Public Debt

by Rodney Jetton

Transparency International - Greece
University of Macedonia, M.A. Thesis
July 2018

Highlights of Greek Corruption research paper (PDF)

Download the Paper (PDF)

Greece to expel 2 Russian diplomats

by Kerin Hope

Financial Times
July 11, 2018

Greece has decided to expel two Russian diplomats and block two others from entering the country in a spat prompted by last month’s deal on a new name for Macedonia, according to two people briefed on the issue.

Zoran Zaev, the Macedonian prime minister, expects to receive a formal invitation to join Nato at the alliance summit opening today in Brussels after agreeing with his Greek counterpart Alexis Tsipras to change the country’s official name to North Macedonia. Moscow is strongly opposed to Nato expanding further in the Balkans, warning that Macedonian membership of the alliance “might have negative consequences for regional security and bilateral relations.”

The Russian diplomats are suspected of bribing Greek officials — including a member of the armed forces — as part of an attempt to undermine negotiations on the name earlier this year. The deal triggered a fierce backlash, including dozens of street protests organised by nationalist Greeks.

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