14th Oct, 2015, Tsipras proceeds with no opposition, on ratification of measures which are included in 3rd MoU

·         The discussion at Greece’s Commons continues as regards the ratification omnibus bill, which is a prerequisite for a) the completion of current evaluation of 3^rd MoU b) the recapitalisation of Greek Banks and c) the official start of discussions concerning the restructuring of Greek debt.

·         At the same time, the process of electing the new leadership at centre right New Democracy party, gradually becomes problematic. The current president of the party Meimarakis, came ballistic to the Elections Committee during its last meeting and withdrew his representative due to issues elated to party' financials and elections process.

·         It appears that there is political scandal in progress, which involves two current Ministers who didn’t declare income and possession of stocks during the previous years. So far, Flabouraris who is Minister of State and Tsipras’ mentor, has admitted that he represents one of the two cases.

·         US special envoy arrives in Athens to discuss the so called IGB gas pipeline project (Interconnector Greek Bulgarian pipeline). US coordinator for international energy affairs Hochstein visits Greece to meet with Ministry of Energy’ Skourletis before discussing the matter in a three-way meeting with the participation of Bulgarian Energy Minister Petkova.

·         Greece’s Statistical Authority, ELSTAT announced that there was less expansion of economic activity during 2014. More specifically, it announced that Greece’s GDP grew by 0.7% in 2014, vs. 0.8% which had initially reported. However, nominal GDP (inflation adjusted) showed a contraction of -1.6%.

·         Hellenic Banks Association's President and Governor of National Bank of Greece’s Chairwoman Katseli stated that Greek Banks won’t need the total amount of 25 bios which have been allocated for the forthcoming recapitalisation. He also emphasized that the potential capital needs aren’t related to internal balance sheet issues but to external factors such as economic contraction.

·         Greece’s social security funds’ financial have been showing a significant deterioration compared to last year. More specifically, revenues declined by 2.5 bios euros showing a primary deficit of 598 mios during the period Jan-Aug, compared to a surplus of 206 mios euros during the same period in 2014. This is due to a drop of 640 mios euros in social security contributions combined by a decrease of 1.5 mios euros reduction of state contribution.

·         Turkish Cypriot leader Akinci stated in NTV television network that the process of transition from the turkish lira to euro has begun in Cyprus occupied territories. He added that the transition to euro and customs union cannot be left for after a positive vote in a referendum on the Cyprus settlement. For the record, there has been an agreement between Cyprus’ President Anastassiades and Akinci on the establishment of a committee for economic harmonisation.

·         Greece dismissed Turkey’s suggestion to set up joint patrols in Aegean Sea with Turkey. However, Greece’s Foreign Ministry stated that is keen to cooperate with Turkey as regards stamping out people-smuggling networks.

·         Turkey’s Erdogan warned Russia that Turkey will seek alternative source of gas supply, after the violation of Turkish airspace by Russian jetfighters during the Syrian campaign. For the record, Turkey gets almost 60% of its gas supplies from Russia’s Gazprom. In addition, Russia has won the contract to build Turkey’ first nuclear plant in Akkuyu.

Risk assessment. Greece gradually returns to reality and normality. I remain on my previous views that a) Greece will fulfil its obligations which are included in the 3^rd MoU and b) Greek Banks’ capital needs will be significantly lower compared to the total amount of 25 bios euros which are included in the 3^rd MoU.

The risk that Greece won’t ratify the omnibus bill by end of this week, is low due to the following reasons: a) Tsipras maintains a refreshed mandate from local electorate and has no internal opposition b) opposition’s political parties (New Democracy and Potami) have entered in a internalization cycle, which weakens their political stance during parliamentary debate and c) vested interests don’t appear as a threat, for the moment.

However, Tsipras has to move fast and secure a) Greek debt restructuring and b) Foreign Direct Investments. Ahead of fluid geopolitical landscape in the region of Turkey, Middle East and Nothern Africa, Greece needs to implement all structural reforms which lead to reduction of taxation and internationalization of local economy, in order to attract significant Foreign Direct Investments.

It is not only the current rate differential between Greece and other Eurozone countries, which make investments in Greek assets appealing. It is Greece’s unique geographical position vis-à-vis the theatre of geopolitical developments. It is mainly its unique position in the region, as it currently represents the only country which is member of Eurozone and NATO at the same time.