02-07-2018 | EYE ON GREECE | EU

02-07-2018 | EYE ON GREECE |

Monday, July 02, 2018

PM announces suspension of VAT hikes on 5 isles due to refugee crisis – hours after asylum seekers deal with Merkel

Greek Prime Minister Alexis Tsipras on Friday announced that a scheduled harmonization of VAT rates on five eastern Aegean islands with the rest of Greece will be suspended, citing the impact of the migrant/refugee crisis on their local economies – speaking shortly after an he and his Spanish counterpart agreed to take back specific asylum seekers from Germany.

https://www.naftemporiki.gr/story/1366355/pm-announces-suspension-of-vat-hikes-on-5-isles-due-to-refugee-crisis-hours-after-asylum-seekers-deal-with-merkel

DM: When time comes, we’ll leave the govt; Opposition claims staged exit ahead of snap elex

Outspoken Defense Minister Panos Kammenos, the head of a small right-wing party that props up the Tsipras government as the junior coalition partner, on Sunday left open the possibility of his party withdrawing its Parliamentary support when a bilateral agreement to resolve the fYRoM “name issue” comes before the legislature for ratification.

https://www.naftemporiki.gr/story/1366701/

Potami drops out of Movement for Change alliance

A sweeping majority of lawmakers with centrist party To Potami voted on Sunday to drop out of the Movement for Change (KINAL) just a few months after the alliance spearheaded by socialist PASOK was founded.

http://www.ekathimerini.com/230242/article/ekathimerini/news/potami-drops-out-of-movement-for-change-alliance

Protest rallies in Athens, Thessaloniki against FYROM name deal

Two rallies were under way in central Athens and Thessaloniki on Sunday to protest June’s deal between Athens and Skopje on the name of the Former Yugoslav Republic of Macedonia’s (FYROM).

http://www.ekathimerini.com/230243/article/ekathimerini/news/protest-rallies-in-athens-thessaloniki-against-fyrom-name-deal

SYRIZA continues to trail New Democracy in new poll

Main opposition New Democracy (ND) holds a solid lead over ruling leftist SYRIZA, according to a public opinion poll conducted by Metron Analysis for newspaper Ta Nea, published on Saturday.

http://www.ekathimerini.com/230217/article/ekathimerini/news/syriza-continues-to-trail-new-democracy-in-new-poll

DBRS upgrades Greece’s credit rating one notch

Canada-based DBRS Ratings upgraded Greece’s main ratings one notch, from B to B (high), on Friday and maintained the positive trend, in an extraordinary review in the aftermath of last week’s Eurogroup decision to ease the country’s debt.

http://www.ekathimerini.com/230216/article/ekathimerini/business/dbrs-upgrades-greeces-credit-rating-one-notch

ATHEX: Banks, CCHBC save benchmark from June drop

The significant gains posted by the majority of Greek stocks on Friday offset all the benchmark’s losses in June, granting it a small monthly rise of 0.23 percent instead. However, a drop of 5.58 percent was recorded over the first half of the year.

http://www.ekathimerini.com/230210/article/ekathimerini/business/athex-banks-cchbc-save-benchmark-from-june-drop

www.enikos.gr


www.protothema.gr

www.newsbomb.gr

www.cnn.gr

www.newsbeast.gr

SUNDAY PAPERS

KATHIMERINI: Tremors for the government, the ‘reserves’ and the polarization

TO VIMA: The deal of the ‘eager’ ones. Merkel, Tsipras, Sanchez form an alliance on refugees.

REAL NEWS: It’s time for the district attorney to intervene and examine the case of floods in Mandra Attica

PROTO THEMA: The 152 MPs supporting the government are having a rough time due to the ‘Macedonian issue’

AVGI: An additional 13th pension is being discussed

MONDAY PAPERS:

ETHNOS: Assaults against tax office auditors are going to become a ‘special offence’

TA NEA: Real estate assets will be auctioned even for unpaid road fines

EFIMERIDA TON SYNTAKTON: Stavros Theodorakis left the Movement for Change; the ‘marriage’ [between the Center and the Center-left] is over

KONTRA NEWS: The River leader Theodorakis and Independent Greeks leader Kammenos set the political scenery on fire

DIMOKRATIA: Monument of betrayal. Papandreou knew about the Memorandum even before he got elected in 2009.

NAFTEMPORIKI: X-ray on real estate ENFIA tax

GERMANY, EUROPE’S STABLE CENTER, is now Europe’s question mark. Let’s get you up to speed.

1. Seehofer resigns — or doesn’t. CSU leader and Interior Minister Horst Seehofer offered his resignation from both jobs late Sunday over his clash with Angela Merkel on refugee policy. Then he thought about it some more and called off a press statement after midnight, saying he would delay the decision until he meets the chancellor one more time Monday morning. Note that he offered his resignation to the party he leads: He asked the pretenders to the throne for permission to leave, which they didn’t immediately grant, convincing him instead to make one last attempt at a compromise with Merkel. Party leadership meetings will resume this morning.

2. Get ready for drama. Today’s the day the government crisis unfolds. The CSU, which doesn’t operate outside Bavaria and only received some 6 percent of votes nation-wide in Germany’s 2017 election, nonetheless has the ambition to shape German politics based on its strong results on its home turf. Now it looks like one or both elements of that unbalanced equation may have reached a tipping point.

3. What the CSU wants. The party expects Germany — as in Angela Merkel — to turn around and declare, as Seehofer did, that the European solution on migration it helped negotiate isn’t good enough. The CSU leader slammed her compromise as “not identical in effect” to what he wants to do, and that’s been the key phrase in the German debate over the past few days. And don’t forget about Bavaria’s October state elections: Most political observers “view Seehofer’s hard line simply as electioneering” — the CSU faces a serious challenge from the anti-immigrant Alternative for Germany — or “score settling,” given his strained relationship with Merkel, Matt Karnitschnig writes in to report. But whether the dissolution of its alliance with the larger CDU is a price it’s willing to pay is still unclear, as it would rob the CSU of much of its influence in Berlin.

4.  Takeaway for the rest of Europe. Merkel’s word alone isn’t worth anything, you need Seehofer’s too (or whoever will follow him at the CSU’s helm), should she and the CDU give in and reach a compromise with the Bavarians. Seehofer could never be bothered to come to Brussels or Luxembourg as an interior minister, relying instead on senior Parteivorstand members with a day job in Brussels — people such as leader of the European Peoples’ Group Manfred Weber and MEPs Angelika Niebler and Markus Ferber.

5. What’s next. Fresh elections can’t be excluded. That means Germany might have a new government just before next year’s European election. The government could also carry on without the CSU without new elections, or replace Seehofer as interior minister. And that means the ongoing dysfunction of Germany’s center right. (Same result if Seehofer comes out of today’s meeting with Merkel pretending nothing happened.)

GOOD MONDAY MORNING! Munich is the most liveable city in the world according to a recent ranking by Monocle magazine. That might be only for “citizens of nowhere” who appreciate a certain degree of conservative hedonism — plus great public pools, the world’s best beer gardens, an abundance of green spaces, decent public transport, proper streets and good schools, all of which is perhaps not unrelated to good local and regional governance. (And as an added bonus, Italy is only three hours away, as long as the borders are open).

But there’s another Munich, the capital of a German state whose citizens, according to its ruling CSU party, are in a state of deep distress that can only be relieved if the party does what Merkel has ruled out: send back a few hundred asylum seekers each month at Bavaria’s borders with Austria. (Neighbor Sebastian Kurz, Austria’s chancellor, told POLITICO last week he won’t accept that.)

SUMMIT SPIRIT: If we’re not mistaken, the spirit of Charlevoix — the G7 meeting that left European participants bewildered and firm in their belief they’re now on their own — was present at the European summit at the end of last week. It was there in trade discussions, but also in leaders’ determination to avoid showing the world they can’t agree on the issue that’s been haunting Europe’s political debate for the past three years — migration.

At least that’s the word on the street, as we came to understand it after being briefed by several participants’ main aides over the weekend. If it wasn’t for Merkel, who some said stopped European Council President Donald Tusk from calling it a night just when it got interesting, that leaders got out their pens to draft a new version of the conclusions, it was for the sake of European pride at being able to come a compromise.

It wasn’t always pretty, we’re told, but they did it in the end, perhaps also in an attempt to not offer the last laugh to Donald Trump and Vladimir Putin (the latter had a good reason to cheer on Sunday anyway — keep an eye on our Linesman blog for an update), and no one was happier about it than Merkel. But it didn’t last very long. Politics are Playbook’s World Cup. And when it comes to Trump… Well, read on.

GLOBAL TRADE FOR BEGINNERS

TARIFFS = AMERICAN SELF-HARM: The European Commission warned the United States that imposing tariffs on European cars “will be harmful first and foremost for the U.S. economy,” in an answer to a U.S. request for comment on the issue. The paper, delivered on Friday to the U.S. trade department’s bureau of industry and security and seen by Playbook, said the EU’s internal analysis “shows that an additional import tariff of 25 percent, applied to automobiles and automotive parts, would in first instance have a negative impact on U.S. GDP in the order of 13-14 billion USD, and the current account balance of the U.S. would be not affected positively.”

Why is that? European carmakers produced 2.9 million cars in the U.S. last year, which amounts to 26 percent of production. Even without Chrysler — which is, as the Commission takes the opportunity to note, “one of the traditional U.S. ‘big three’ manufacturers” but is nowadays of “European ownership” — production by EU-owned companies in the U.S. “still amounts to 16 percent of national production.” They need parts, which they often import, and which would in turn make cars more expensive. It’s what Donald Trump wants, but the catch is, it could harm U.S.-based jobs.

Plus, companies export the final product from the U.S. “EU companies based in the U.S. export a significant part of their production, thus contributing substantially to improving the U.S. trade balance, which is a priority of the administration,” according to the Commission paper, also a handy explainer for beginners of how global trade works. “Around 60 percent of automobiles produced in the U.S. by companies with exclusive EU ownership are exported to third countries, including the EU. Measures harming these companies would be self-defeating and would weaken the U.S. economy.”

Don’t even think of retaliation:“The impact will be aggravated significantly by the likely countermeasures of U.S. trading partners over a significant volume of trade,” the Commission warns, citing figures of up to $294 billion. “These would further amplify the negative effect on GDP.”

That’s only a few of the arguments the Commission makes; but it might be the most powerful one that it will harm the U.S. economically (BMW said similar things in a letter to the U.S. administration.) Nobody in Brussels expects Trump to react to more general points, or come around to the idea that Europeans are right to say their cars are not a risk to American security. Nor is he likely to be impressed by the fact that that imports have been “stable and correlated to U.S. general GDP growth,” or that the EU’s carmakers also contribute to “enhancing the skillsets of the U.S. workforce.” My story here.

Trump’s belief: “The European Union is possibly as bad as China, only smaller,” Trump told Fox News in an interview that aired Sunday. “They send a Mercedes in, we can’t send our cars in. Look what they do to our farmers. They don’t want our farm products. Now in all fairness they have their farmers … But we don’t protect ours and they protect theirs,” he said. Plus: “Everybody who ever bought a Harley-Davidson voted for Trump … and they are very unhappy about it … I feel that maybe Harley, I think they are going to take a big hit.”

Juncker’s ammunition: “I was very much supported in my intention to accept President Trump’s invitation and I will travel to Washington before the end of July,” Commission President Jean-Claude Juncker said Friday after the EU summit. “In summary, I will be presenting what I said to Mr. Trump at the G7 Summit in Canada. Namely: If you add everything together — trade in goods, profits made by American multinationals in Europe and services — then the balance is completely different, because then we will have a deficit and not our American friends. We’re going to do all that again in Washington.”

Will it help? “When it comes to Europe we have to show that we exist, that we are united and that we are presenting — member states, the Commission, the president of the Council — the same view. We should de-dramatize these relations … I am not sure that we will find an agreement between U.S. and the EU, but we will try.”

IN OTHER STORIES

THE TRUMP FACTOR: Some in Britain think they have a secret weapon in the Brexit negotiations: Donald Trump. “The U.S. president’s increasingly outspoken attacks on the European Union, coupled with the threat of a looming trade war, may work in London’s favor in the final Brexit shakedown, senior U.K. officials and negotiators believe,” Tom McTague and Charlie Cooper report. How could that be? Because British government officials are incurable in their deep belief that the Germans love their cars more than the single market. “At a time when Donald Trump is looking at a 20 percent tariff on European cars, the Germans may look favorably on a deal that avoids trade barriers with their biggest export market for cars,” said one senior U.K. government official.

Not so fast: The EU’s customs union celebrated 50 years on Sunday. European Commissioner for Economic and Financial Affairs Pierre Moscovici praised it as the first real step toward Europe becoming the world’s largest trading bloc, and “a tremendous and unique accomplishment.”

AGREE TO DISAGREE: MEPs and members of the U.S. House of Representatives met in Sofia over the weekend; their joint statement, seen by Playbook, is a document of troubled transatlantic times — see the divergent language on the Iran agreement — and shows a clear gap between Trump and even Republican members of the House when it comes to trade. The statement confirms all participants’ “belief in a rules-based, open, and non-discriminatory multilateral trading system that plays a crucial role in promoting global economic growth and sustainable development.”

Keep talking: It also underlines that “unwarranted unilateral and protectionist measures, such as tariffs, create market uncertainty and undermine the competitiveness of both U.S. and EU companies and harm the global value chains within which they operate.” Conclusion: Keep talking, as there’s a “need to further enhance our legislative dialogue as a means to maintain and deepen the transatlantic relationship.” The next meeting will take place in Washington in December.

MALTA TAKES AIM AT PILATUS BANK: Maltese financial regulators urged the European Central Bank to revoke the banking license of Pilatus Bank, which had been accused of money laundering and other crimes by investigative journalist Daphne Caruana Galizia, who was murdered last year. Malta’s Financial Services Authority (MFSA) announced its recommendation to the ECB in an unusual Saturday night press release, “with no explanation for the timing,” as David Herszenhorn notes. More here.

EU TRANSPARENCY SAGA: Germany’s permanent representation to Brussels will — voluntarily — follow new EU transparency rules once they’re in place (negotiations are ongoing, avid readers will remember) and meet only with lobbyists who have registered in the EU transparency register. That’s what the foreign office’s secretary of state, Andreas Michaelis, wrote in response to a question by Die Linke Bundestag member Fabio De Masi, dated June 21, seen by POLITICO.

Not good enough: The move is “to be welcomed,” De Masi told us. “But it’s also salami tactics. The Irish and Dutch have already moved on and are indeed informing about lobby meetings of their permanent representatives,” something that the German government will only “decide upon in the light of the outcome of the negotiations” on the new inter-institutional rules.

5G HYPE: A June agreement on global standards for so-called 5G telecommunications infrastructure — which will enable smartphones, mobile devices and, eventually, autonomous cars to work anywhere in the world — put an end to the yearslong battle to control the future of the mobile world. But one thorny issue still sticks out, writes Mark Scott: China, and its efforts to dictate the next generation of global telecoms rules. More on the geopolitics of the 5G race here.

SMELLY SURPRISE: Tourists landing in Corfu this summer might be met with a rather unpleasant sight: roughly 4,000 tons of decomposing household waste piling up across the island. Why? A long-running dispute over the local Temploni landfill, which is overflowing and has been closed. Locals are fiercely resisting the opening of a new landfill, and local government pleas to allow it to ship the garbage off the island are being resisted in Athens. Harry Cooper and Ginger Hervey have the story.

NEW RIGHTS FOR TRAVELERS: “In what might be viewed as a nice corollary to “roam-like-at-home” — arguably the European Commission’s most mass-appeal deliverable in recent years — strengthened EU consumer rules to protect travelers take effect on July 1, just in time for the peak summer travel season. What’s new? David Herszenhorn has the story.