by Kerin Hope
Financial Times
June 9, 2017
Greece’s parliament has approved a handful of extra reforms demanded by creditors in order to unlock more than €7bn of aid and complete a much delayed second review of the country’s €86bn current bailout programme.
While the leftwing Syriza government pushed a package of 120 fiscal and structural reforms through parliament last month, another 20 measures still had to be implemented either through legislation or administrative decrees.
The five amendments voted on Friday included several measures delayed because of opposition from Syriza politicians.
Greece hopes to receive approval for the aid payment at a meeting of eurozone finance ministers on June 15. The review was due to be completed last November but dragged on amid disagreements over pension and tax reforms.
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Friday, June 9, 2017
Greek Government Accused of Deporting Turkish Asylum Seekers
by Patrick Kingsley
New York Times
June 8, 2017
In the early morning of May 24, a Turkish journalist fleeing a long prison sentence at home crossed the river dividing Greece and Turkey and claimed asylum in a police station on the other side.
A few hours later, according to two human rights organizations, the journalist, Murat Capan, was still in police custody — but back in Turkey, having been forced to return at gunpoint.
The Greek government denies that account, by the Hellenic League for Human Rights and the International Federation for Human Rights, which say that twice in the last few weeks, on May 24 and June 2, Turks fleeing persecution have been shipped back to their country.
The Hellenic League documented a total of 17 forcible deportations, or pushbacks, including those of seven children.
More
New York Times
June 8, 2017
In the early morning of May 24, a Turkish journalist fleeing a long prison sentence at home crossed the river dividing Greece and Turkey and claimed asylum in a police station on the other side.
A few hours later, according to two human rights organizations, the journalist, Murat Capan, was still in police custody — but back in Turkey, having been forced to return at gunpoint.
The Greek government denies that account, by the Hellenic League for Human Rights and the International Federation for Human Rights, which say that twice in the last few weeks, on May 24 and June 2, Turks fleeing persecution have been shipped back to their country.
The Hellenic League documented a total of 17 forcible deportations, or pushbacks, including those of seven children.
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Wednesday, June 7, 2017
Greece calls on Europe to offer growth incentives, help break debt impasse
June 7, 2017
Greece urged its European lenders on Wednesday to offer incentives that will boost growth and help break an impasse between the euro zone and the International Monetary Fund on the size of relief the country needs to make its debt sustainable.
During a meeting of euro zone finance ministers last month, Greece, its euro zone lenders and the IMF failed to agree on the debt relief measures to be implemented after its current bailout expires in 2018, mainly because of different growth assumptions. They are now aiming for a deal at a June 15 Eurogroup meeting.
Government spokesman Dimitris Tzanakopoulos said growth incentives in the coming years, such as investment packages, could help bridge the differences and help "find the common ground needed for a comprehensive solution sought by all sides".
"This is an issue which has engaged the current discussions and it may be the key to reach a deal, in other words to find the common ground among all sides on growth projections," Tzanakopoulos said during a press briefing.
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Friday, June 2, 2017
Greek debt relief could mean creditors waiting for up to 123 billion euros
June 2, 2017
A Greek debt relief scenario that put back interest payments until 2048 would mean the nation's euro zone creditors deferring receipt of up to 123 billion euros ($138.7 billion), according to a forecast by Germany's Finance Ministry.
The ministry's calculations, which were contained in a letter to a member of parliament seen by Reuters on Friday, contemplated the various restructuring scenarios laid out by the euro zone bailout fund, the European Stability Mechanism (ESM).
"With such an interest deferral, it would de facto be a new loan with a volume that depends on the development of interest rates," the document said. "The estimated volume of the deferred interest up until 2048 would be around 118-123 billion euros."
The Finance Ministry declined to comment specifically on the paper.
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Wednesday, May 31, 2017
Constantine Mitsotakis, former prime minister of Greece, dies aged 98
Financial Times
May 31, 2017
Constantine Mitsotakis, who has died aged 98, served briefly as prime minister of Greece between 1990 and 1993. But he wielded influence over its volatile politics for more than four decades as the head of a powerful political dynasty from the island of Crete.
Mitsotakis, a pro-western centrist, made the launch of unpopular market reforms his overriding priority as premier, following a decade of socialist rule. His New Democracy government carried out sweeping price liberalisations, overhauled the state pension system and set up the country’s first privatisation programme.
Back in opposition in 1994, he presciently warned the socialist government of Andreas Papandreou, the prime minister, that Greece would eventually have to seek help from the International Monetary Fund if further fiscal and structural reforms continued to be postponed.
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Greek privitisation agency accepts €1.5bn bid to extend Athens airport contract
by Kerin Hope
Financial Times
May 31, 2017
Greece’s privatisation agency TAIPED has accepted an improved bid worth €1.5bn from the state-controlled Athens International Airport company for a 20-year extension of its current operating concession.
The agreement opens the way for TAIPED (The Hellenic Republic Asset Development Fund) to sell its 30 per cent stake in the airport operator later this year.
The Syriza government is committed to privatising the airport, Greece’s largest, under the terms of the country’s €86bn third international bailout.
TAIPED said the airport company bid €600m to retain the operating concession until 2046, while the Greek state would receive an additional €890m in revenues over the 20-year period.
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Financial Times
May 31, 2017
Greece’s privatisation agency TAIPED has accepted an improved bid worth €1.5bn from the state-controlled Athens International Airport company for a 20-year extension of its current operating concession.
The agreement opens the way for TAIPED (The Hellenic Republic Asset Development Fund) to sell its 30 per cent stake in the airport operator later this year.
The Syriza government is committed to privatising the airport, Greece’s largest, under the terms of the country’s €86bn third international bailout.
TAIPED said the airport company bid €600m to retain the operating concession until 2046, while the Greek state would receive an additional €890m in revenues over the 20-year period.
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Monday, May 29, 2017
Constantine Mitsotakis, Who Forged Greek-EU Ties, Dies at 98
Bloomberg
May 29, 2017
Constantine Mitsotakis, the Greek prime minister who strengthened ties with the European Union and attempted unpopular cuts to state spending in the 1990s, has died. He was 98.
He died in the early hours of Monday morning, according to a statement from his family.
Mitsotakis became prime minister in April 1990 when his New Democracy party won the right to govern on its own after nine years in opposition or as a coalition partner. During his three-year tenure, he consolidated Greece’s membership in the EU, known as the European Communities at that time, by securing his country’s accession to the union during the Maastricht Summit in December 1991. As foreign minister, he oversaw Greece’s entry into the EU a decade earlier.
As the Cold War was coming to an end, the pro-American Greek leader improved relations with the U.S. in 1990 by becoming his country’s first prime minister in 27 years to visit the White House, during George H.W. Bush’s administration.
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Sunday, May 28, 2017
Greece offers opportunities for investors willing to take risks
Financial Times
May 28, 2017
An open-air cinema with a natural backdrop of twinkling city lights and the inky Aegean Sea is the latest attraction for shoppers at One Salonica, a mall in the Greek port of Thessaloniki.
The new screen is the eighth that Cineplexx, an Austrian investor, has opened at the mall in a low-income neighbourhood since the company came to Greece two years ago. Christof Papousek, chief financial officer and a partner in Cineplexx, says the investment has worked out well.
“We’re profitable there, we feel in a very comfortable position and we’re ready to expand in the Greek market,” he says.
Such confidence might seem barely conceivable. Greece has been gripped by economic crisis for years: indeed Cineplexx arrived in mid-2015 just as the country was falling off Europe’s investment map. Capital controls had been imposed, the leftwing Syriza government was locked in a dispute with international creditors and Greeks were bracing for an involuntary exit from the euro.
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Tuesday, May 23, 2017
Debt forgiveness is not the solution for Greece
by Daniel Gros
Centre for European Policy Studies
May 23, 2017
A superficially plausible narrative to the continuing problems besetting Greece is that it cannot recover because of a crushing debt burden. However, this narrative overlooks some basic facts and cannot explain why all the other peripheral countries that needed official support (Portugal, Ireland, Spain and Cyprus) are recovering.
The key to understanding Greece’s debt situation is that most of it is owed to the European institutions, which have already extended the maturity to over 30 years and are charging very low interest rates. Expenditure on interest now amounts to 3.2% of GDP, which is much less than what the Greek government had to spend on interest before the crisis and before the Troika! Interest expenditure is also lower for Greece than for Italy (3.9% of GDP) and much less than for Portugal (4.2% of GDP). Even the US government has to spend more on interest (3.8% of GDP) than the Greek government. But nobody argues that these countries need debt forgiveness to be able to grow.
An implicit conclusion from the fact that interest is not an important cost item despite high debt is that debt forgiveness makes little difference at low interest rates. Let us assume that the official European lenders were to forgive Greece €100 billion, undeniably a huge sum. What would this change? This huge concession would save the Greek government a little over €1 billion in interest payments each year, which represents less than 1% of the country’s GDP. Savings of this order of magnitude are unlikely to make much of a difference.
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Centre for European Policy Studies
May 23, 2017
A superficially plausible narrative to the continuing problems besetting Greece is that it cannot recover because of a crushing debt burden. However, this narrative overlooks some basic facts and cannot explain why all the other peripheral countries that needed official support (Portugal, Ireland, Spain and Cyprus) are recovering.
The key to understanding Greece’s debt situation is that most of it is owed to the European institutions, which have already extended the maturity to over 30 years and are charging very low interest rates. Expenditure on interest now amounts to 3.2% of GDP, which is much less than what the Greek government had to spend on interest before the crisis and before the Troika! Interest expenditure is also lower for Greece than for Italy (3.9% of GDP) and much less than for Portugal (4.2% of GDP). Even the US government has to spend more on interest (3.8% of GDP) than the Greek government. But nobody argues that these countries need debt forgiveness to be able to grow.
An implicit conclusion from the fact that interest is not an important cost item despite high debt is that debt forgiveness makes little difference at low interest rates. Let us assume that the official European lenders were to forgive Greece €100 billion, undeniably a huge sum. What would this change? This huge concession would save the Greek government a little over €1 billion in interest payments each year, which represents less than 1% of the country’s GDP. Savings of this order of magnitude are unlikely to make much of a difference.
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Greece and the Troika – Lessons from international best practice cases of successful price (and wage) adjustment
by Ansgar Belke & Daniel Gros
Centre for European Policy Studies
May 23, 2017
This paper reviews cases of successful price and wage adjustment, which are often regarded as constituting best practice, in Australia, Latvia and the German new states and contrasts them with the Greek experience under the Troika programmes. Latvia stands out as having had the quickest adjustment in wages. By contrast, before the crisis, Greek wages appeared to have been largely insensitive to labour market conditions but this changed with the programme. We find that the reaction of wages to unemployment in Greece under the programme was similar to that observed in Germany and Portugal (a case that has attracted less attention). A priori, it is likely that the change in wage behaviour in Greece was due to the labour market reforms imposed under the programme. But this cannot be proven beyond doubt.
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Centre for European Policy Studies
May 23, 2017
This paper reviews cases of successful price and wage adjustment, which are often regarded as constituting best practice, in Australia, Latvia and the German new states and contrasts them with the Greek experience under the Troika programmes. Latvia stands out as having had the quickest adjustment in wages. By contrast, before the crisis, Greek wages appeared to have been largely insensitive to labour market conditions but this changed with the programme. We find that the reaction of wages to unemployment in Greece under the programme was similar to that observed in Germany and Portugal (a case that has attracted less attention). A priori, it is likely that the change in wage behaviour in Greece was due to the labour market reforms imposed under the programme. But this cannot be proven beyond doubt.
More
Greece Has the Resources to Heal Itself
Bloomberg
May 23, 2017
The euro area's finance ministers again failed to come to an agreement on debt relief for Greece. No surprise there. Hammering out the details would force them to accept an uncomfortable reality: Greece won't be ready to tap private debt markets for years to come. In the meantime, if it wants to get off life support, it will have to find a way to cut tax evasion.
The unpopular Greek government of Alexis Tsipras keeps trying for a debt-relief deal. All its many concessions, which have made Greeks and everyone else forget this was once a rebellious, far-left cabinet, are geared toward that goal, and so is the mammoth, 245-page austerity bill passed last week. There are more pension cuts and more tax increases, all in the name of showing shareholders that Greece is willing to be frugal and so should be allowed to tap markets again. Starved of investment, the country is in recession again, the only euro-area member to report negative growth (minus 0.5 percent year-on-year) in the first quarter of 2017. Greece almost certainly won't meet the growth target set by the European creditors -- 3 percent in 2018; the Bloomberg consensus forecast for that year is just 1.9 percent.
A nominal haircut for official investors is, however, a red line Germany and other northern European countries won't cross, as the Eurogroup reiterated in its statement on Monday. Instead, the statement repeats the insistence that Greece maintain a primary budget surplus of 3.5 percent of gross domestic product for the medium term. The International Monetary Fund wants more specifics from Greece's creditors on how maturities and interest rates on the debt will change if it is to keep taking part in the Greek program. The Greek government wants a deal so it can explain to voters why they're expected to put up with continued austerity. The required specifics, however, can only emerge before the September election in Germany -- say, at the next Eurogroup meeting in June -- if the creditors incur no additional costs. Otherwise, Chancellor Angela Merkel's government will have to answer to conservative voters for her inability to stop paying Greece.
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Monday, May 22, 2017
Greek Creditors, IMF Seek to Bridge Differences Over Debt Relief
by Viktoria Dendrinou & Rainer Buergin
Bloomberg
May 22, 2017
Euro-area finance ministers gathered in Brussels on Monday, seeking a compromise with the International Monetary Fund on debt relief for Greece that could signal the final act in the seven-year-old drama for the continent’s most indebted state.
The IMF is reluctant to participate in a bailout unless the euro area ensures the country’s 315 billion-euro ($355 billion) debt load is sustainable. Some nations like Germany, which resists altering Greece’s debt profile, won’t release any new funds until the Washington-based fund joins the program. Athens needs the new aid installment before it has to repay about 7 billion euros to lenders in July.
“The starting positions are all rather wide apart,” French Finance Minister Bruno Le Maire told reporters before the gathering. “There’s a lot of work that needs to be done to bring the positions closer.”
The so-called Eurogroup meeting began after finance ministry deputies earlier in the day failed to resolve the outstanding issues, as disagreements between the IMF and Germany over Greece’s economic outlook and required debt relief persisted, according to two European Union officials with knowledge of the talks, who asked not to be identified because the discussion was private.
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Bloomberg
May 22, 2017
Euro-area finance ministers gathered in Brussels on Monday, seeking a compromise with the International Monetary Fund on debt relief for Greece that could signal the final act in the seven-year-old drama for the continent’s most indebted state.
The IMF is reluctant to participate in a bailout unless the euro area ensures the country’s 315 billion-euro ($355 billion) debt load is sustainable. Some nations like Germany, which resists altering Greece’s debt profile, won’t release any new funds until the Washington-based fund joins the program. Athens needs the new aid installment before it has to repay about 7 billion euros to lenders in July.
“The starting positions are all rather wide apart,” French Finance Minister Bruno Le Maire told reporters before the gathering. “There’s a lot of work that needs to be done to bring the positions closer.”
The so-called Eurogroup meeting began after finance ministry deputies earlier in the day failed to resolve the outstanding issues, as disagreements between the IMF and Germany over Greece’s economic outlook and required debt relief persisted, according to two European Union officials with knowledge of the talks, who asked not to be identified because the discussion was private.
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Anarchists Fill Services Void Left by Faltering Greek Governance
New York Times
May 22, 2017
It may seem paradoxical, but Greece’s anarchists are organizing like never before.
Seven years of austerity policies and a more recent refugee crisis have left the government with fewer and fewer resources, offering citizens less and less. Many have lost faith. Some who never had faith in the first place are taking matters into their own hands, to the chagrin of the authorities.
Tasos Sagris, a 45-year-old member of the Greek anarchist group Void Network and of the “self-organized” Embros theater group, has been at the forefront of a resurgence of social activism that is effectively filling a void in governance.
“People trust us because we don’t use the people as customers or voters,” Mr. Sagris said. “Every failure of the system proves the idea of the anarchists to be true.”
These days that idea is not only about chaos and tearing down the institutions of the state and society — the country’s long, grinding economic crisis has taken care of much of that — but also about unfiltered self-help and citizen action.
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Sunday, May 21, 2017
Athens calls on creditors to strike a deal
Financial Times
May 21, 2017
Greece is calling on its creditors to strike a deal that would allow it to honour billions of euros in debt repayments, arguing that it has upheld its side of the bargain by pushing through painful tax and pension reforms.
IMF officials and eurozone finance ministers will hold talks on Monday intended to pave the way for Athens’ next tranche of bailout aid so that it can make more than €7bn of debt repayments in July.
“Greece has done its bit, most would say more than its bit,” Euclid Tsakalotos, Greece’s finance minister, told the Financial Times.
He added that a deal would open the door to the country’s participation in the European Central Bank’s economic stimulus programme and provide “the signal to the markets that so many investors have been waiting for”.
The aid is dependent on bringing the IMF into the bailout programme as a financial partner.
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Friday, May 19, 2017
Greek parliament backs reform package
by Kerin Hope
Financial Times
May 19, 2017
Greece’s parliament has narrowly approved an omnibus reform package needed to unlock more than €6bn of bailout aid and open the way for the country’s international creditors to reach a deal on debt relief.
Lawmakers from the governing left-wing Syriza party and its coalition partner, the right-wing Independent Greeks, backed the bill in a late-night vote on Thursday.
The centre-right opposition New Democracy party, which holds a strong lead in opinion polls, voted against the package, even though it is committed to implementing reforms if it wins the next election.
Alexis Tsipras, prime minister, told parliament: ”Undoubtedly there are some difficulties [with the package] but we’ve got to the top of the ladder, and I’m confident we’re entering a period of stability and strong recovery.”
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Financial Times
May 19, 2017
Greece’s parliament has narrowly approved an omnibus reform package needed to unlock more than €6bn of bailout aid and open the way for the country’s international creditors to reach a deal on debt relief.
Lawmakers from the governing left-wing Syriza party and its coalition partner, the right-wing Independent Greeks, backed the bill in a late-night vote on Thursday.
The centre-right opposition New Democracy party, which holds a strong lead in opinion polls, voted against the package, even though it is committed to implementing reforms if it wins the next election.
Alexis Tsipras, prime minister, told parliament: ”Undoubtedly there are some difficulties [with the package] but we’ve got to the top of the ladder, and I’m confident we’re entering a period of stability and strong recovery.”
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Wednesday, May 17, 2017
Greeks walk out in national strike over austerity
Financial Times
May 17, 2017
Greek unions staged a nationwide strike on Wednesday to protest against fresh austerity measures that parliament is being asked to approve as part of the country’s €86bn international bailout.
Civil servants and staff at state hospitals and public utilities took part in the 24-hour walkout, which disrupted international flights and other transport across the country.
The leftwing Syriza-led government of Alexis Tsipras, prime minister, signed up this month to a new €4.5bn package of medium-term fiscal and structural reforms in order to unlock bailout aid. Greece needs the aid to repay debt that matures in July.
Union leaders billed the strike as “a last chance” to influence the government ahead of Thursday’s vote on the measures, which are being debated as part of an omnibus reform bill under fast-track procedures in parliament.
Thousands of protesters holding banners and leftwing party flags gathered outside the parliament building, but the mood appeared subdued compared with angry anti-bailout demonstrations under previous governments.
“We’re betrayed by our own people. It’s the poor that are going to suffer this time more than any other group,” said Nassos Vardas, a retired construction worker and former official with the communist trade union PAME.
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Sunday, May 14, 2017
Greece downgrades 2017 growth forecasts
Financial Times
May 14, 2017
Greece has unveiled a four-year budget proposal that assumes sharply lower growth rates after months of wrangling with international creditors over reforms needed to unlock further bailout aid and open the way for medium-term debt relief.
The Greek economy is projected to grow 1.8 per cent this year, against an earlier forecast of 2.7 per cent according to the proposal, which was presented to parliament late on Saturday alongside an omnibus bill containing scores of structural reforms.
Lawmakers are set to approve both bills by May 18, ahead of a meeting of the euro area finance ministers on May 22 where the issue of debt relief for Greece is due to be discussed.
The Syriza government’s revised growth projection for 2017 is more pessimistic than the European Commission’s forecast of 2.1 per cent, down from 2.7 per cent at the start of this year.
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Friday, May 12, 2017
IMF, euro zone say need more time to reach Greek debt relief deal
Reuters
May 12, 2017
The International Monetary Fund and euro zone government lenders need more time to reach an agreement on debt relief for Greece because the euro zone is still not sufficiently clear in its intentions, IMF chief Christine Lagarde said on Friday.
Top euro zone officials and Lagarde met on Friday on the sidelines of a G7 finance ministers meeting in the Italian port city of Bari to discuss debt relief which the Eurogroup of euro zone finance ministers promised in May 2016, under strict conditions.
"We will carry on working on this debt relief package. There is not enough clarity yet. Our European partners need to be more specific in terms of debt relief which is an imperative," Lagarde told reporters on entering the G7 talks.
The Fund has made debt relief for Greece a condition for its participation in the latest bailout for Athens, the third one since 2010. Several euro zone governments, led by Berlin, want the IMF to participate for credibility reasons even though they disagree with the need for debt relief.
German Finance Ministers Wolfgang Schaeuble, also at the meeting in Bari, asked if he would be prepared to ease the conditions for debt relief, said:
"We are prepared to stick to what we have agreed in May 2016. That is the basis on which we are working ... I am still in favour of getting a solution, at least a political solution, in the Eurogroup on the 22nd of May."
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Thursday, May 11, 2017
EU Passports for Sale in Sunny Cyprus Lure Rich Russians' Cash
Bloomberg
May 11, 2017
In Limassol, on the southern coast of Cyprus, shop signs in Cyrillic outnumber those in Greek, the local language. Yachts emblazoned with Russian monikers fill berths in a newly built marina. And just past the office of radio station Russkaya Volna, restaurants lining the boardwalk serve pelmeni with, of course, vodka.
This Moscow-on-the-Mediterranean has blossomed as Russians and their money flock to the tiny European Union outpost to become, in a sense, not Russian. Long known as a hub for offshore Russian finance -- and more recently as a focus of investigations into Russian links to President Donald Trump’s entourage -- Cyprus has enabled a more sophisticated way to camouflage those funds: If you can’t launder a Russian’s cash, the scheme goes, launder the Russian himself.
The wave began after the government streamlined its money-for-passports program to help Cyprus recover from the 2013 collapse of its banking system and an ensuing recession. Now foreigners can become citizens in less than six months in exchange for investing at least 2 million euros ($2.2 million) in Cyprus property or 2.5 million euros in government bonds or companies.
Since then, the nation has issued about 2,000 passports, Finance Minister Harris Georgiades said in an interview in Nicosia last month. About half have gone to Russians, according to PricewaterhouseCoopers and other consultants who guide clients through the process. The impact has been profound, sparking about 4 billion euros of foreign investment last year -- equivalent to almost a quarter of the island’s annual economic output.
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Tuesday, May 9, 2017
Number of Chinese Tourists Visiting Greece to Rise 10-Fold
Bloomberg
May 9, 2017
Fosun International Ltd., the Chinese conglomerate that’s part of a venture to transform the former Athens airport site into one of the biggest real-estate projects in Europe, is now turning its attention to Greek tourism.
Fosun wants to use its stake in tour operator Thomas Cook Group Plc to start building vacation packages specifically for the vast Chinese market, Senior Vice President Jim Jiannong Qian said in a May 4 interview in Athens. The Chinese government predicts 1.5 million of its citizens will start vacationing in Greece in the medium term.
Tourism accounted for over one-quarter of Greece’s gross domestic product in 2016, according to the Greek Tourism Confederation. Visitor numbers in 2016 reached 28.1 million, up 7.6 percent from 2015. Tourists generated 13.2 billion euros ($14.5 billion) in travel receipts, according to the Bank of Greece. Of these travelers, 150,000 came from China, Beijing says.
“Greece is a very safe place for visitors,” said Qian who is also president of Fosun’s Tourism and Commercial Group. There are also good opportunities for tourism investments in Greece, he said.
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