12th October 2015, Greek leftist government’s first austerity bill will be submitted today

·         ECB’s Draghi stated that there should be debt relief after the completion of current evaluation. During his interview to Kathimerini of Sunday, he mentioned that the discussion regarding debt restructuring will occur only after the completion of current review. Draghi represents the third head of Greece’s troika of creditors, who reconfirmed that Greece’s debt structuring is on the table and discussion will start just after the completion of current review.In addition, he emphasized the need that Greece will implement all structural changes which are included in 3^rd MoU, in order that local economy will return to growth trajectory.

·         IMF’s Lagarde reconfirmed from Lima - Peru that IMF won’t participate in Greece’s program as long as there is no agreement as regards debt restructuring. She emphasized the need that Greece will implement structural reforms mainly in pension system and banks.

·         Athens International Airport’s CEO, Paraschis was voted as CAPA Airport Chief Executive of the Year 2015. The International Committee of Centre of Aviation valued highly AIA’s innovation, high standard of service vis-a-vis the reduction of operating cost, reduction of carbon footprint, development of the biggest photovoltaic park in an airport, and dynamic marketing strategy.

·          According to press linkages, the EU is planning to merge all Greek Banks’ subsidiaries in Balkan states by end of 2015. This means that in case there are four Greek banks operating in one Balkan state, they will all merge into one Greek bank. At the moment there are about 2,700 branches of Greek Banks in Balkan states with approx. 35,000 employees. As a second step, each subsidiary will be sold within 2016.

·         Greek exports were reduced by -8.9% in August. It is the third consecutive month of exports’ drop. However, Greece’s trade balance deficit also dropped by -8.8% compared to Aug’14. In general, trade balance deficit dropped by -18.5% during the period Jan-Aug (compared to the same period in 2014). This is mainly due to a higher reduction of imports (-9.9%) vs. the reduction of exports (-3.3%).

·         The reduction of value of exports reflects mainly to the drop of price of fuels. On the other hand exports without fuels increased by +6.8% in August (compared to Aug’14). In terms of foreign markets, exports decreased by -22.4% to countries outside EU, and exports to EU region increased by +8.1%.

·         It appears that Greece Ministry of Finance will roll out a massive plan to minimize cash transactions and maximize bank cards’ usage throughout Greek economy. In addition, the use of bankcards will be the sole mean of transactions for a series of professions which were champions of tax evasion such as doctors, lawyers, plumbers, electricians, builders etc.  

Risk assessment. I remain on my previous view that the current coalition SYRIZA – Independent Greeks won’t last long. Despite the fact that Tsipras enjoys a refreshed mandate, the list of structural reforms which are included in the requirements to complete current review, impact vested interests and require broad political support which goes beyond current coalition. Regardless Tsipras verbal determination, it is still doubtful that the current coalition will finally ratify and/or implement those structural reforms. Considering the verbal objection of all other pro Europe political parties to support this austerity bill, we may see coalition’s first losses during next Saturday’s vote.

SYRIZA’s government will submit its first bill with austerity measures today. It appears that there is one MP ‘Independent Greeks’ (SYRIZA’s ally), who has sent ambiguous messages regarding his final stance during the vote of austerity bill. In addition, there is another MP who resigned from Central Committee of SYRIZA, as an act of protest as regards the way that lists of Party’s candidates were formed before elections. If both MPs either abstain or vote against the forthcoming bills, then the austerity bill will be ratified by 153 MPs (out 300).

It appears, that Greece’s government in an effort to meet budget targets, has chosen mainly to raise taxes instead of cutting expenses. In addition, taxation will be increased across all citizens, regardless if they could tax evade or not. It becomes evident that this will result to the increase of citizens’ arrears and social dissatisfaction.

Last but not least, Ministry of Finance’s Alexiadis announced a series of measures, which will reduce cash transactions and increase the bank cards' usage. Greece traditionally is a cash society which means that this is a structural reform of immense importance, which also includes cultural elements; and this makes it even harder to implement.