Thursday, May 31, 2018

EU official says Greece’s bond market access is ‘fragile’

by Derek Gatopoulos

Associated Press

May 31, 2018

A top European Union official in Greece says the country’s access to bond markets remains “fragile” amid the ongoing financial turmoil triggered by the political uncertainty in Italy.

Declan Costello, who supervises the Greek bailout program for the European Commission, made the cautionary remarks at a conference in Athens on Thursday. Greece is preparing to end its third international bailout program in late August with plans to return to financing itself on bond markets.

“It’s clear that while Greece is coming out of the program — it has tentatively regained market access — that the situation remains fragile,” Costello said.

“And it will be very, very important that Greece continues to demonstrate, not just in the period up to the end of the program, but actually in the critical period after the program, that reforms are on track.”


Greece eases capital controls ahead of expected bailout exit in August

by Kerin Hope

Financial Times

May 31, 2018

Greece plans to increase the monthly limit on cash withdrawals from local bank accounts to €5,000 from €2,300 as part of measures to ease capital controls ahead of the country’s expected exit in August from its current bailout programme.

The finance ministry said the measures were “another step on the road to a full relaxation of capital controls”. They would take effect in June.

Capital controls were imposed in June 2015 when fears that Greece was about to crash out of the euro prompted a run on the country’s banks.

Under the latest regulations, bank customers will be able to transfer €4,000 bi-monthly to accounts abroad and take up to 3,000 in euros or foreign currency in banknotes on trips outside Greece.


Monday, May 28, 2018

The Far Left and Right Run Riot on Greek Streets

by Yannis Palaiologos

Wall Street Journal

May 28, 2018

Greece’s long economic crisis may technically be over, as the country is on course to exit its third bailout in August. But the decade-long depression leaves in its wake a society seething with resentment and divided on the causes of the catastrophe. The Greek political system is ill-equipped to deal with this fallout—which includes various shades of political violence.

Earlier this month Mayor Yannis Boutaris of Thessaloniki, Greece’s second-largest city, was attacked and beaten during a ceremony to commemorate the massacre of Pontic Greeks by Turkish forces during World War I. Mr. Boutaris, 75, has drawn the ire of far-right groups for years over his social liberalism and insistent push for better relations with Turkey and the former Yugoslav Republic of Macedonia. Two days after the attack, anarchists stormed Greece’s top administrative court, smashing window panes and tossing paint on the walls. The incidents are symptoms of a wider trend in the country: the inability of the state to defend the rule of law as various groups challenge its monopoly on force.

In the early years of the bailout era, Greece was beset by violent mass demonstrations. Several members of Parliament and other officials were waylaid in public for not standing up to the demands of the country’s creditors. Syriza, at the time a small hard-left opposition party, often rationalized these incidents as the product of the legitimate indignation of the people. In some cases, the party’s local cadres and student members led the way. Meantime, the far-right group Golden Dawn grew more influential and attempted to impose its dominance on the streets, attacking and even killing immigrants and left-wing activists.


Wednesday, May 23, 2018

Greece unveils post-bailout growth plan

by Kerin Hope

Financial Times

May 23, 2018

Alexis Tsipras, the Greek prime minister, has unveiled a “strategic growth plan” to be implemented after the country exits the current €86bn bailout programme in August.

“It’s a plan that shows the path Greece will follow after the fiscal stabilisation programme ends, a plan that will lead us to an era where we stand on our own two feet.” Mr Tsipras told parliament. “It details our achievements, our goals and our aspirations.”

The 100-page policy document presented to MPs forecasts sustained growth above 2 per cent yearly over the next five years in line with projections by Greece’s international creditors while setting a modest target of €11bn of new investment.

Economic reforms would continue, underpinned by “key performance indicators and ongoing rigorous monitoring,” according to the text, which was produced by Greek finance ministry experts, indicating that Greece expects to remain under close surveillance by its creditors, the EU and the International Monetary Fund.


Monday, May 14, 2018

Greek consultant sues health minister and deputy

by Kerin Hope

Financial Times

May 14, 2018

The wife of Greece’s central bank governor has taken legal action against the country’s health minister and his deputy, claiming they unlawfully annulled an EU-backed project in which her company was involved and undermined her professional reputation.

Lina Nikolopoulou, a healthcare consultant, is married to Yannis Stournaras, governor of the Bank of Greece.

“I have faced harassment from the judicial authorities for more than a year over this particular project even though my company’s participation was ruled as satisfactory by auditors in line with EU regulations,” Ms Nikolopoulou said in an interview.

Greece’s health ministry last year retroactively annulled a €3.5m project in which Mindwork, a company that Ms Nikolopoulou controls, was involved. Her lawsuit requests that Greece’s anti-corruption prosecutor investigate why the ministry did so.


Monday, May 7, 2018

Fragile Balkans’ future depends on Macedonia deal

by Tony Barber

Financial Times

May 7, 2018

If the definition of progress is that a country no longer names its capital’s airport after a warrior king who died 2,300 years ago in Babylon, then there is surely hope for the Balkans — the source of many a modern European conflict. In February, Macedonia’s reformist leadership reversed the previous government’s bombastic nationalism and changed the name of Alexander the Great airport to Skopje International. The ice began to melt in one of post-Communist Europe’s most vexed disputes.

On the highway into Skopje, capital of the former Yugoslav republic, large green signs tell of more change. The road no longer bears Alexander’s name but is called Friendship Highway. Macedonian leaders consider these relabelling exercises to be not cosmetic but genuine concessions to Greece. For 27 years, Athens has accused its northern neighbour of laying claim to Greece’s territory, cultural heritage and identity by using Macedonia as a name and Alexander as a state symbol.

Negotiations aimed at finding a compromise on Macedonia’s name are approaching a climax. The foreign ministers of Greece and Macedonia have met 20 times. Should a deal be struck, it would send a rare signal to other quarrelling Balkan states and communities — Serbia and Kosovo, for example, or the Muslims, Croats and Serbs of Bosnia and Herzegovina — that even the most painful historical wounds heal with treatment.


Saturday, May 5, 2018

Greek banks face €15.5bn hit to capital under stress tests

by Martin Arnold & Kerin Hope

Financial Times

May 5, 2018

Greece’s four biggest banks would take a €15.5bn hit to their average capital in a future economic downturn, according to the results of the European Central Bank’s stress test of the country’s main lenders.

The ECB’s health check of the Greek banking system is designed to determine if any of the banks need extra equity before the country enters talks on leaving its eight-year bailout programme.

Senior Greek officials said the outcome of the exercise meant there was “no immediate need for a capital increase by any bank”. However, one official said that while the banks were out of immediate danger they needed to clean up their balance sheets and several were likely to raise capital soon — notably Piraeus Bank, which emerged as a laggard in the tests.

“The stress test have gone as well as we could expect,” said one official, adding that they would ease Greece’s return to borrowing on international markets.