Sep 25th, 2015, Greece's first cabinet meeting will need to take tough decisions

• Refugee influx continues through Greek islands amid delays as regards EU strategy roll out. Although there was significant progress at last EU Leaders' meeting, there has been significant delays as regards refugee crisis management. It appears that negotiations between EU and Turkey for this purpose, are imminent. 

• Press linkages indicate that the Greek government plans to move migrants from Athens’ city centre to Elliniko. As a reminder, Elliniko is Europe’s largest urban plot and is included in privatisations program. 

• Greece’s current account showed a remarkable surplus of 4.5 bios euro in July’15; surplus is significantly higher compared to July’14 which reached the level of 1.3 bios euros. As a result, the overall current account switched positive and closed at a surplus of 966 mios euros, during the 7 month period.

• A significant portion of current account's improvement reflects to the Securities Market Program (SMP) i.e. the return of 1.8 bios euros of profits realised by other central banks. However, exports (without fuels and ships) increased by 3% vs the same month last year and imports decreased by 40.7% due to capital controls.

• Manufacturing turnover index (without fuels) increased by +3.2% during the period Jan-Jul. However, the same index showed a reduction of -15.4% in July’15 vs. the same month last year. The sectors which continued to show increase were a) food (+0.7%) b) pharmaceuticals (+3.9%) c) electronic products (+66.4%) and d) various products related to transportation (+36.1%).

• Agriculture sector’s output price index increased by +4.8% in July 2015, vs. a reduction of input price index by -1.6%. The input price index has been decreasing for the last 24 consequent months while output price index has been increasing since Dec’14. 

• EU demanded that the Greek Government abolish tax exemption on locally alcoholic beverage such as raki and tsipouro. Raki and tsipouro carry a special consumption tax of 12.75 euros per liter of ethyl alcohol, which is 50% lower than that imposed on other drinks (25.50 euros/liter of alcohol). Bulk raki and tsipouro officially have an even lower tax, at just 1.4 euros/liter. Beer has a 6.50 euros/liter rate, while wine has no such tax. 

Risk assessment. Greece's new government’s agenda consists of mainly of a) implementation of the 3^rd MoU ahead of discussions regarding debt restructuring b) completion of Banks’ recapitalisation within 2015 c) fight against tax evasion, corruption and d) actions to handle refugee crisis within EU context. 

Its agenda is considered extremely heavy and frontloading. However, the new Parliament is more centrist, more pro Europe, compared to the previous one. Hence there will be no excuses as regards delays or program’s derailment.

EU will need to start negotiations with Turkey in order to resolve refugee crisis. It has already offered to Turkey 1 bios euros to handle the situation and prevent its further escalation. However it appears that money is not the key success factor. This is because Turkey has already spent several bios to manage the situation.

The ongoing crisis refugee crisis increased Turkey’s geopolitical role. Turkey demands the creation of a non-flight zone and/or a buffer zone in the northern part of Syria, hence money are not enough and this could be a game-changer for EU's foreign and defence policy.

Last but not least, ahead of the more serious EU's involvement in the ongoing Middle East crisis, Greece’s geopolitical role will be further enhanced. The question is whether Greece's political system, economy and society will see this historic opportunity and pursue a long term strategy according to which, Greece will support EU strategy and emerge as regional business hub and a regional stability factor in South East Europe, East Mediterranean and Middle East.