Greece delays bond sale after Italian market turbulence

by Kerin Hope & Kate Allen

Financial Times
November 30, 2018

Greece has quietly postponed a landmark bond sale after the prolonged sell-off in Italy’s bond market pushed up its cost of raising new debt.

The nation’s leftwing Syriza government had hoped to issue a benchmark 10-year bond within a few weeks of the country’s exit from its €86bn third bailout in August, as a signal to investors that Greece had returned to normalcy.

But the rise in Italian bond yields has rippled through into Greek markets, pushing the Greek 10-year yield well above 4 per cent, double that of Portugal, to what Athens bankers called “impossible rates”.

In response, the government has allowed its bond sale to lapse.

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Greek central bank aims to use lenders’ tax credits to fix bad debts

by Kerin Hope

Financial Times
November 21, 2018

The Greek central bank will on Thursday unveil its plan for slashing the large pile of non-performing loans clogging up the balance sheets of the country’s banks in an effort to help them resume normal lending.

The proposal calls for Greece’s five largest banks to transfer up to €7.5bn of deferred tax assets to a special purpose vehicle, which would then issue bonds and use the proceeds to acquire about €42bn of non-performing loans (NPLs) held by the banks.

“This transaction would help restore confidence in the Greek banking system by cutting the bad debt portfolio in half,” said Spyros Pantelias, the head financial stability at the country’s central bank, who devised the scheme.

“It would also give the Greek banks full access to the capital markets and allow them to channel fresh capital into the economy,” he added.

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Greek civil servants stage strike over pay and pensions

by Kerin Hope

Financial Times
November 14, 2018

Greek civil servants staged a 24-hour strike on Wednesday to press for wage and pensions increases that would reverse deep cuts in incomes enacted during the country’s three international bailouts since 2010.

Construction workers and employees of the state electricity utility also joined the walkout, the first large-scale union action since Athens exited its most recent rescue programme in August.

The strike came days after Alexis Tsipras, the leftwing prime minister, pledged to add more than 35,000 new civil service jobs over the next three years, rolling back tight restrictions on hiring imposed by Greece’s creditors during eight years of austerity.

In an unexpected move that caused uproar among church authorities, the premier also announced a plan to shift 9,000 Orthodox priests off the state payroll to make room for a similar number of new civil service appointments, without first having consulted the synod of Greek bishops.

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How a group of Athens troublemakers goes unpunished

Economist
November 8, 2018

The down-at-heel neighbourhood of Exarchia in central Athens, known for its lively bars and tavernas, has long been home to a small but disruptive community of self-described anarchists. Violent street battles take place at weekends: extremists throw Molotov cocktails at police, who respond with tear gas. Long-suffering residents say their complaints are routinely ignored by the authorities.

One anarchist group, Rouvikonas (Rubicon), uses more sophisticated tactics to make its presence felt. Based in a cinema-cum-bar close to Exarchia’s central square, populated with drug pushers and sellers of bootleg cigarettes, Rouvikonas stages nuisance attacks against embassies, government buildings and the offices of multinational companies. Its members are not usually arrested. Prosecutors dismiss their actions as “too insignificant” to justify full-fledged investigation.

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