01-08-2018 | EYE ON GREECE | EU

1-08-2018 | EYE ON GREECE |

Wednesday, August 1, 2018

Debt ‘unsustainable’ after 2038, argues IMF

The International Monetary Fund is insisting on the need for pension cuts from 2019 and that the labor reforms not be reversed despite the government’s plans. It is also worried about the prospect of elections in 2019, warning that there is no scope for handouts. However, above all, the IMF has expressed its concern regarding the long-term sustainability of the Greek debt, sending shivers across the markets to which Greece expects to return.


Stournaras says markets will punish Greece if it backtracks

The markets are waiting to see whether Greece remains committed to its promised reforms after the bailout program ends on August 20, and will punish the country if it backtracks on its pledges, central banker Yannis Stournaras warned in an interview with the Financial Times published on Tuesday.


Mitsotakis insists heads must roll

The war of words between the government and opposition conservatives continued on Tuesday with New Democracy leader Kyriakos Mitsotakis calling out Prime Minister Alexis Tsipras over the fact that no one has resigned over last week’s deadly wildfires.


Urgent Univ. of Athens study: Speed of blaze, no warning among 15 conclusions from deadly east Attica wildfire

The University of Athens’ geology and geo-environment department on Tuesday released an urgent report on last week’s deadly wildfire in eastern Attica prefecture, east of the greater Athens area, pointing to what it called 15 main reasons that caused such a major natural disaster.


SNF to support Greek fire department with 25 mln grant

A week since more than 90 people were killed after Greece’s worst wildfire in a decade hit the seaside resort of Mati, east of Athens, the Stavros Niarchos Foundation (SNF) announced Monday it would support the work of the Greek fire department with a 25 million euro grant “in order to contribute to the difficult work of the men and women… fighting for the protection of the country’s residents and its natural resources.”


Greek May retail sales rise 4.6 pct y/y, led by department stores

Greek retail sales by volume rose 4.6 percent in May compared to the same month last year after an upwardly revised 1.5 percent increase in April, statistics service ELSTAT said on Tuesday.


ATHEX: Stocks edge higher on increased turnover

The Athens Exchange (ATHEX) registered its highest daily turnover in 22 sessions following the publication of the International Monetary Fund’s Article IV report on Tuesday, although there was a mixed overall picture for local stocks, with mid-caps sliding.







KATHIMERINI:  Excuses and transfer of blame [on behalf of the government for the wildfires]

ETHNOS:  The proceedings of the disorganization

TA NEA:  Guilty secrets ‘burn’ Tsipras

EFIMERIDA TON SYNTAKTON:  Illegal construction and open storage spaces targeted

AVGI:  New Democracy: Hypocrisy in the forefront, rottenness in the background

RIZOSPASTIS:  The Greek Communist party demands immediate relief measures of those afflicted by the wildfires and protection for the people

KONTRA NEWS:  Sweeping government restructure at the end of August

DIMOKRATIA:  BoG Governor Stournaras acts like a modern-time Nero

NAFTEMPORIKI:  “Yes, but…” by the IMF for the economy and banks

Pardon? 3D printed gun downloads have been blocked by a U.S. judge. For now …

DROUGHT POLICY: Agriculture Commissioner Phil Hogan on Tuesday briefed Commission President Jean-Claude Juncker on EU countries’ various pleas for help dealing with droughts. Countries were invited to tell Brussels what they want, with Poland, by the way, an early adopter in this call for solidarity. Expect Brussels to sign checks, OK exceptions to state aide rules or at least agree to derogations from certain rules (such as allowing land that is left fallow to be used to feed animals), among other things to help farmers or accommodate their lobbies.

GOOD MORNING. It seems the heat is really getting to some people — they’re coming up with the craziest ideas. Belgium will now make journalists who live in the country pay €50 every six months as an entrance fee to the security perimeter around European summits. More bluntly, the country is demanding reporters pay for being allowed to do our jobs.

Be careful what you wish for before excluding media from summits based on their financial means. It doesn’t take much of an imagination to foresee Moscow graciously offering scholarships for those covering Brussels. There’s no free press without free access and the liberty to do whatever we need to — or, as an old saying from Berlin-Kreuzberg goes: Ohne Igel an den Orgeln keine Orgien in Georgien.


DESIGNATED SURVIVORS: Juncker is spending his last week in Brussels before taking some time off, but he has repeatedly made it clear that he wants the Commission open for business over the summer. The president has made sure there’s always a commissioner on duty at the Berlaymont to handle whatever crisis this August may bring (and we present a veritable smorgasbord of options below).

Who’s in charge: According to an internal planning note that Playbook has seen, Commissioner Věra Jourová took the first shift on Monday and Tuesday, handing over to Elżbieta Bieńkowska for the remainder of this week. From August 4, Günther Oettinger is on duty. He’ll hand the baton to Tibor Navracsics for the week after. Pierre Moscovici will be last on permanence from August 18 to 23. So what will those who are on deck be doing while they’re home alone, aside from turning up?

To-do list …

EPPO sign-off: Bieńkowska has signed (on Jourová’s behalf) a Commission decision that confirms the Netherlands will become the 21st EU country to join the European Public Prosecutor’s Office (EPPO). That decision will be made public today, according to Commission officials. Malta has notified the Commission that it’s on-board too, diplomats told Playbook. The Commission will need to sign off on that as early as next week.

Migration action plan: Madrid has asked for help dealing with the migration crisis after a recent shift of arrivals to the country’s shores. Juncker made political assurances in a letter to Prime Minister Pedro Sánchez, sent Tuesday and seen by Playbook, promising “the full support of the European Commission to develop the appropriate and effective response to address the increasing migratory pressure along the Western Mediterranean route.”

Cutting a check: One of Juncker’s solutions is to disburse money to Tunisia and Morocco to help them boost border controls. “The Commission is doing its utmost to ensure a speedy delivery of this program. Discussions are ongoing at full speed with the International Centre for Migration Policy Development … I am confident that we can conclude these discussions rapidly and sign the contract soon,” the letter — written in Spanish — says. “Soon” here might mean the check will require an official signature from whichever commissioner is on duty.

SUMMER SCHEDULE: We’re told there’s a crucial 9:45 a.m. Berlaymont meeting every day to discuss the day’s business, featuring Juncker, the Cabinet members of the commissioner on duty, the secretariat-general, the legal service and the spokespersons’ service — with meetings before and after in various combinations of the above. So expect those who are sticking around to be busy in the mornings.


CAREFUL ABOUT YOUR FRIENDS: The International Monetary Fund said eurozone countries aren’t offering Greece enough space to breathe, warning that the country will need further debt relief if it intends to finance itself and sell bonds to capital markets. The verdict that Greece’s debt will only be sustainable in the medium term, which came from the IMF’s official audit for the country, is most unwelcome news for Brussels — and Athens — a few weeks ahead of the planned end of the most extensive bailout exercise for a single country that the world has ever seen.

Both creditors and Athens are keen (bordering on desperate) to show that Greece is fit to stand on its own feet again from August 21. Bjarke Smith-Meyer has more for POLITICO Financial Services Pros. This certainly has the potential to become a proper summer crisis again.

CAREFUL WHO YOU TALK TO I: Britain’s Foreign Minister Jeremy Hunt was in Paris on Tuesday to see his French counterpart Jean-Yves Le Drian in person, after a visit to Berlin last week. Nonetheless, he decided it’s best to convey to his interlocutors what they now need to do via a British newspaper. “France and Germany have to send a strong signal to the Commission that we need to negotiate a pragmatic and sensible outcome that protects jobs on both sides of the Channel,” Hunt told the Evening Standard, preemptively blaming the Commission’s negotiating strategy for any possible “breakdown in relations and trust between Britain and European countries.”

So far, neither France nor Germany have shown much interest in giving the U.K. a break, remaining steadfastly in lockstep with the Commission’s “no cherry-picking” line. But as the Brexit end-game nears, Hunt and Theresa May are hoping for dividends from an argument that hasn’t worked for the past two years — that if Brexit goes wrong, “for every job lost in the U.K., there will be jobs lost in Europe as well,” in Hunt’s words. We’ll call that the “German carmakers will pressure Merkel” approach.

Plausibility check I: BMW said Tuesday that it will invest €1 billion in building a new plant in Hungary.

Plausibility check II: The City of London appears to be facing fewer job losses than previously estimated — at least for now. That’s because original forecasts didn’t take into account the possibility of a transition period; plus the City is expecting more jobs from fintech. Cat Contiguglia got the scoop.

Hunt is in Austria today to meet with Foreign Minister Karin Kneissl. Meanwhile, Prime Minister Theresa May scored a rather rare invitation to visit Emmanuel Macron’s holiday retreat in the south of France — their talks on Friday at Fort de Brégançon will be followed by a dinner, according to the Elysée. (Macron’s government, meanwhile, survived two no-confidence votes on Tuesday over the Benalla scandal.)

Opinion: ‘Stop trying to win Brexit.’ Simon Usherwood of the Economic and Social Research Council’s U.K. in a Changing Europe program argues the EU and Britain need to quit using the Trump model for Brexit negotiations, and remember they’re both on the same side.

CAREFUL WHO YOU TALK TO II: Bob Woodward, the legendary Washington Post journalist, is taking on the Trump administration. Simon & Schuster, Woodward’s publisher, announced that it plans to release his 19th book, titled “Fear: Trump in the White House,” on September 11. And, as one former official said: “It’s gonna be killer. Everyone talked with Woodward.” Annie Karni has more.

CAREFUL WHO YOU ALLOW INTO YOUR FAMILY: Jobbik used to position itself on the very, very far right of Hungary’s political spectrum. But the more Viktor Orbán moves his Fidesz party down the nationalist, anti-Muslim (“Christian,” in Orbán’s words) path, the less space for Jobbik. The party’s president Tamás Sneider told Hungarian media he can now see Jobbik joining … the European Peoples’ Party, alongside Angela Merkel’s CDU, Austria’s ÖVP, Italy’s Forza Italia — and Fidesz, for now. No joke. H/t Lili Bayer.

CAREFUL, NIGHT WOLVES ABOUT: Slovakian President Andrej Kiska warned that the group known as the Night Wolves helped Russia annex Crimea and aren’t just “harmless motorcycle lovers.” Kiska urged the government to do something about the group’s presence in Slovakia, AP reports.

Meanwhile, President Vladimir Putin has created a new directorate inside the Russian army to promote patriotism. Sound familiar?

CAREFUL RESURRECTING THE PAST: Spain’s Socialist Prime Minister Pedro Sánchez is planning to remove the remains of dictator Francisco Franco from the country’s biggest fascist-era monument, the Valley of the Fallen, on the outskirts of Madrid, arguing it’s time to heal the wounds of the past. But those opposed to the move argue he’s reopening them. Diego Torres has the strange story.