13-07-2018 | EYE ON GREECE | EU

13-07-2018 | EYE ON GREECE |

Friday, July 13, 2018

Tsipras, Erdogan talks ‘not easy’

Prime Minister Alexis Tsipras said on Thursday after talks with Turkish President Recep Tayyip Erdogan that it “wasn’t the easiest of meetings” and that he raised the issue of the two Greek soldiers held without charge in the neighboring country since March.


Eurogroup postpones 15-bln€ tranche to Greece due to Berlin’s objections to island VAT decision

A scheduled disbursement of 15 billion euros to Greece, the final tranche of the current bailout, has been kicked back to early August, after Berlin reportedly objected to a high-profile decision by the coalition government late last month to “freeze” a scheduled harmonization of the VAT rate on five eastern Aegean islands.


IMF: Cooperation with European creditors over post-bailout supervision in Greece; foreseen procedure to be followed

The IMF’s executive board will convene on July 27 to consider a review for Greece, the so-called article IV consultation, which will include forecasts for a debt sustainability study for the thrice bailed out country.


Zaev calls NATO’s invite to FYROM for talks a ‘big bang’

The prime minister of the Former Yugoslav Republic of Macedonia, Zoran Zaev, lauded NATO’s decision to invite the tiny Balkan nation to begin accession talks, describing it as a “big bang.”


Russian Foreign Ministry says Moscow to respond in kind

The Russian Foreign Ministry on Thursday said it would respond to Greece’s decision to expel two Russian diplomats.


Amendments in Parliament fuel snap election scenarios in Greece

Widespread speculation over early elections in Greece continued unabated this week, and was in fact exacerbated by the tabling of two amendments in Parliament to allow the possible holding of local government and European Parliament elections at the same time in 2019.


Commission forecast for Greece unchanged: 1.9% GDP growth in 2018; 2.3% in 2019

The EU Commission’s summer forecast for the Union’s national and overall economies puts the annual GDP growth rate for Greece at 1.9 percent, rising to 2.3 percent in 2019.


ATHEX: CCHBC keeps local stock index afloat

Coca-Cola HBC led the Greek stock index higher on Thursday as the biggest company listed in Athens enjoyed a rise of 3.50 percent, just as the majority of stocks headed lower. Turnover narrowly cleared the 30-million-euro bar.







KATHIMERINI: Cold shower in the Eurogroup

ETHNOS: German whip for the [reduced] VAT in the islands

TA NEA: Double slap regarding VAT and pensions

EFIMERIDA TON SYNTAKTON: Unilateral action by the Germans

AVGI: The gargantuan second election district of Athens is no more

RIZOSPASTIS: Drums of war – Dangerous developments for the people

KONTRA NEWS: The black funds of Mount Athos

DIMOKRATIA: The meeting between Tsipras and Erdogan produced zero results

NAFTEMPORIKI: Germany ‘freezes’ the loan installment due to the reduced VAT in the islands

GOOD FRIDAY MORNING. What a week, again. The world watched the operation to save 12 kids and their soccer coach from a cave in Thailand. (They’re now safe, without any help from Elon Musk’s tiny submarine.) The World Cup rewarded us with really great matches — it’s a shame it’ll be over this weekend. Donald Trump was in Brussels, and wow was he in Brussels. He’s now in Britain, where an inflatable Trump made news as much as the inflated one did. Finally, two years after the referendum to leave the EU, there’s now a British plan on what Brexit shall be all about.


NOW WE KNOW: What the  U.K. wants from the EU post-Brexit is an “association agreement” (the EU has one with Ukraine, for example) which includes a “free-trade area” for goods and a closely intertwined customs relationship, alongside a “security partnership,” according to a long-awaited white paper. For evidence of just how highly anticipated the paper really was in the House of Commons, watch the moment Thursday when copies were distributed to (or thrown at) MPs.

Under the proposals, Britain would continue to abide by EU rules and standards for goods, to protect “just-in-time” supply chains and avoid the worst chaos for manufacturers. The paper doesn’t even completely exclude European Court of Justice oversight. Of course, the afore-mentioned close cooperation prompted the resignation of Brexit Secretary David Davis and Foreign Secretary Boris Johnson and won’t go down well with ardent Brexiteers.

Leavers poised to derail May’s masterplan: May “finally has a plan but she may not have enough votes to see it through — and that’s before she’s started worrying about Brussels,” Charlie Cooper reports from London. And the Leavers got some ammunition from U.S. President Donald Trump, who warned in an interview that Theresa May’s new Brexit strategy will “kill” any future trade deal with the U.S. once the U.K. leaves the EU. (Trump also said he was “very surprised and saddened” by Boris Johnson’s resignation, adding that he hopes the ex-foreign secretary would return to government “at some point,” and would be a “great prime minister.”)

White paper through a Continental prism: The proposals look like continued membership in a quarter of the single market only, where goods flow freely, but nothing else does.

That’s a problem for the EU, as its exponents have been saying for two years (and did so again last weekend). First reactions were less hostile, more reluctant: Chief negotiator Michel Barnier said he needed to properly look at the paper first (and it’s about 100 pages long), while the European Parliament’s Brexit steering group welcomed the fact that there is such thing as a British position on the future relationship at all.

Crocodile tears: German Finance Minister Olaf Scholz told reporters as he arrived for a Eurogroup meeting that he regrets that “it is now becoming very difficult for the financial system in the U.K.” Indeed, London’s bankers reacted furiously to the paper, reports Silvia Sciorilli Borelli for POLITICO Brexit and Financial Services Pros. It envisions “regulatory freedom” for the U.K. in the digital and services sectors, financial services included — meaning that regulation will, voilà, differ and hence market access will be restricted.


YOU THOUGHT IT WAS OVER? HOLD OUR BEER. Trump was unhappy with what America’s NATO allies committed to on Wednesday and made a fuss, reopening the debate on Thursday in a rather brusque way, by apparently threatening to pull out of the Alliance. Secretary-General Jens Stoltenberg, in his closing press conference on Thursday, had a hard time explaining what happened. “We felt that we needed some more time to finish the discussion about burden-sharing. I felt, we all felt,” he said. NATO officials said Trump was furious over media coverage suggesting that the first day of the summit had proceeded smoothly.

Nothing changed? Stoltenberg shifted the meeting into a leaders-only emergency session, moving guests, partners and the EU institutions’ leaders out of the room. Eventually, things calmed down again. The outcome? The statement remained unchanged, as French President Emmanuel Macron was quick to point out: The only thing that counts is the final statement agreed by leaders, he said, “where we have reaffirmed the commitments taken … to increase expenditure to 2 percent by 2024.”

‘4 percent’s the right number’: Trump said in his press conference that “after the 2 percent, we’ll start talking about going higher. But I said, ultimately we should be, in years — in advance — we should be at 4 percent.”

Whatever Trump believes countries have now committed to, he left Brussels happy. “We have now got it to a point where people are paying a lot more money … And if you talk to Secretary-General Stoltenberg, he gives us total credit, I guess that’s me. He gives me total credit,” Trump said. “Everybody in that room by the time we left, got along and agreed to pay more.”

Very stable Trump? European leaders beg to differ, David Herszenhorn reports.

In brief: Trump came to claim he fixed a crisis (which he certainly highlighted, if not created, himself), and left with a sales pitch. He said: “The United States by far makes the best military equipment in the world. The best jets, the best missiles, the best guns. The best everything — we make, by far … The material — the equipment that we make is so far superior, everybody wants to buy our equipment. In fact, it’s the question, can they make it? Because they are doing very well. Can they make it for so many people?”

Five takeaways:

1. Trump is America’s salesman-in-chief, for gas, weapons and whatever else may come his way (soy beans have recently been on his radar). But his sales methods are questionable.

2. Defense spending is back on NATO’s agenda and won’t go away.

3. It’s not so easy to tear NATO apart, even if you dislike multilateralism, and Mutti-lateralism in particular: There’s your own administration, Congress, the Republican Party, and those Europeans who believe in paper more than mere power.

4. A shaky NATO just invited Russia to test Article 5 solidarity.

5. ‘But this was a fantastic two days,’ Trump said. “This was a really fantastic — it all came together at the end.”

Trump arrived in London Thursday afternoon — which gives Brussels a chance to take a deep breath, until he meets Russian President Vladimir Putin on Monday.

TRUMP FALLOUT I: Trump and Putin are heading to Helsinki for their meeting, Reid Standish writes, and “Finns have mixed feelings.”

TRUMP FALLOUT II: Matthew Karnitschnig writes that Trump is raising pressure on European allies to isolate Iran, citing a foiled Paris bomb plot blamed on Tehran that Washington believes targeted American citizens, including Rudy Giuliani, the former New York mayor and current Trump lawyer.

BUY AMERICAN LNG! U.S. Energy Secretary Rick Perry was in town Thursday, continuing to push Trump’s not-so-subtle message that the EU, or rather some of its members, would do better buying American instead of Russian energy. “The United States does not support pipelines such as Nord Stream 2 and a multi-line Turk Stream that will only increase reliance on a single source of supply,” he said, standing alongside European Commissioners Maroš Šefčovič and Miguel Arias Cañete, Kalina Oroschakoff writes in to tell us. Trump’s America first mantra “doesn’t mean America alone,” Perry said. “It means when you’re thinking about a new market provider … we want you to think about America first.”

Freudian slip: He added that strengthening energy and research ties would be a chance “to advance our national, excuse me, mutual interests even further.”


GOTTA START SOMEWHERE: The first formal European Council session under the Austrian presidency kicks off this morning. EU finance ministers will gather to clear up after June’s meeting and look into what leaders told them to do. What is on the table is a lot of unfinished business — don’t look for grand plans (of reforming the eurozone, defining what a eurozone budget could be, or agreeing on a backstop for the banking resolution mechanism) on today’s agenda.

The discussion is ongoing about sequencing and balance, and “we will need to work on a roadmap for beginning the political discussions on a European Deposit Insurance Scheme,” Eurogroup Chairman Mário Centeno said Thursday. “All this will require further work,” he added.

Not so fast: Earlier Thursday, German Finance Minister Olaf Scholz told the European Parliament’s ECON committee that he expects Parliament to agree to the Council’s line for stricter rules for banks’ lending as a basic condition for any further EU and eurozone reforms. “This is the prerequisite for progress to be possible elsewhere,” Scholz said. (He’s facing domestic pressure on that file.)

The nitty gritty: Leaders invited ministers to come to an agreement on two VAT reforms. The problem is, they’re “interlinked,” as a diplomat familiar with the ECOFIN agenda said (even though the only thing they have in common is that they’re about taxes). And France and the Czech Republic have blocked one another, and thereby both files, for a while now. Don’t expect a decision today — it’s more of a shaking-the-tree exercise, the diplomat said. Maybe fruit will come off in the fall.

Only tangible outcome: A document on terms of reference, or a joint line, for a meeting of G20 finance ministers and central bank governors in Buenos Aires later this month.

WELCOME TO THE CLUB. The Eurogroup on Thursday farewelled the Greek program (not without delaying disbursement of the last tranche until Greece really enacts all the promised reforms), closing a chapter (or a whole tome) that covered half of the common currency’s history.

Next step: enlargement. Eurogroup finance ministers made it clear they would welcome Bulgaria’s yet to-be-made-official request to join the euro’s waiting room, aka ERM II, as well as the banking union “We welcome the commitments taken by the Bulgarian authorities in the areas of banking supervision, other financial sector issues and institutional quality and governance. They are highly relevant for a smooth entry and participation in ERM II,” Mário Centeno said, adding that there are a few more conditions to be fulfilled. They include a credible fight against corruption.