Greek Finance Minister Euclid Tsakalotos returned to familiar territory this week – in the United Kingdom – for the 13th “Roadshow” organized by the Athens Stock Exchange in London on Friday, an annual opportunity for the bourse to try and attract much-needed investment to the country.
Highlights of Tsakalotos’ address to representatives of major investors and City executives were:
– Debt relief extended by creditors last June provide a “clear” path for the next 10 to 15 years.
– “Bad loans” burdending banks’ ledgers remain a major problem
– Primary budget surpluses, without any further measures, will reach 5 percent of annual GDP in 2022, allowing 3.5 billion euros in “fiscal space” for more “expansionary” budgets from now on. His pledges that excess cash from high surpluses will be used for spending, nevertheless, came amid concerns that ambitious fiscal targets are actually impeding growth in the thrice bailed-out country.
– Maintained that suspending planned pension cuts – i.e. harmonizing differences (downwards) between pensioners earning benefits before 2016 with those that retired after 2016 under less favorable terms – will not affect Greece’s social security system after 2030. He also insisted, despite a statement by an IMF spokesman a day earlier saying otherwise, that he’s “not sure” the Fund still considers the measure is a structural reform. Tsakalotos said he could not understand why someone definitely wants a reduction in pensions.
– Guarded optimism that a solution will be found with creditors to avoid implementing the austerity measure after all.
– The Greek state is not anxious to return to sovereign markets for borrowing, but will instead rely on a “cash cushion” – of nearly 30 billion euros – that allows Athens to pick when market conditions are best.
– Assessed that a precautionary credit line would have prevented the country’s recent credit upgrades.
– A view that the country’s public debt management agency will announce its strategy by the end of the year.
When asked about the continuing bureaucratic delays in issuing licenses for the Skouries gold mining concession in northern Greece, part of the Hellas Gold investment, the biggest industrial FDI in the country, he merely said would-be investors should look at the “big picture”.
As such, he pointed to the privatization of ports, energy infrastructure and in achieving 2018’s targets. He also cited the Helleniko property development project as overcoming obstacles – the latter is another massive investment and privatization bedeviled by bureaucratic foot-dragging and legal challenges at every turn.
Tsakalotos said the concession awarded to the Eldorado Gold subsidiary (Hellas Gold) was a “special case”, telling the gathering of fund managers that the mining operation was close to a touristic area, and also suffers from a lack of zoning.
An absence of zoning and town planning everywhere in the country is a standing problem, given that Greece still lacks a unified, functional and digitalized land registry (cadastre).
