Energy sector importance highlighted at post-grad launch

The Department of International and European Studies at the University of Piraeus marked the start of new academic year with a reception late last week focused on its postgraduate program “Energy: Strategy, Law and Economics”, one of the few such educational programs available in Europe.

The event was attended by a range of authorities, including academics and officials representing the energy market, Energy Ministry, Regulatory Authority for Energy (RAE), industry, and shipping sector.

The postgraduate program offers outstanding students scholarships that are sponsored by DEPA, the Public Gas Corporation, DESFA, the Natural Gas Transmission System Operator, Sidenor, a subsidiary firm of Greek metals group giant Viohalko – active in the fields of steel, copper, aluminium production, processing and trade, as well as real estate development – and the Environment, Energy & Climate Change Ministry.

The postgraduate program’s director, Nikolaos Farantouris, welcomed the students, or new generation of energy professionals, referring to the importance of cooperation between universities and the State in establishing a scientific community for the fragile but dynamic energy sector.

In line with this principle, energypress is associated with the University of Piraeus’s Department of International and European Studies for the “Energy Papers” series, an initiative that renders articles on current energy-related policy, regulation, and operation of energy markets, which contributes to public debate on important issues.

 

Tax break for energy-efficiency upgrades viewed favorably

The coalition is believed to be preparing a package of tax breaks for energy-efficiency upgrade work to home property, a move that is expected to lead to energy savings for consumers while also providing needed impetus to building activity, currently stagnant.

Earlier this week, Environment, Energy & Climate Change Minister Yiannis Maniatis proposed the implementation of tax breaks for expenses of up to 15,000 euros, during a meeting with Finance Minister Gikas Hardouvelis. Sources said the Finance Ministry has responded favorably to the proposal.

The tax breaks could provide additional life to the “Saving at Home” buildings energy upgrade program, initially launched to cover the 2007-2013 period as part of the National Strategic Reference Framework (NSRF), an EU funding program. Maniatis said his ministry was currently seeking 400 million euros to finance the program’s extension, from 2014 to 2020.

In practical terms, the tax break measure’s benefits will be confined to home owners with existing savings that can be spent on energy-efficiency upgrade work to their respective properties.

The measure’s implementation would provide the local building sector a needed boost, as, according to his estimates, 70 percent of materials and fittings to be used in the energy-efficiency upgrades would be locally produced.

Minister calls for tax break on energy-efficiency upgrades

Environment, Energy & Climate Change Minister Yiannis Maniatis has proposed the implementation of a tax break for expenses of up to 15,000 euros on energy-efficiency upgrade work to home property.

Maniatis, who proposed the tax break during a meeting yesterday with Finance Minister Gikas Hardouvelis, noted that the measure promised to serve as a “comprehensive economic, development and environmental action that the government needs to adopt.”

The Energy Minister made reference to the high level of interest in the “Saving at Home” buildings energy upgrade program, which was implemented under the 2007-2013 National Strategic Reference Framework (NSRF), an EU funding program.

Maniatis said be believed tens of thousands of the 5.5 million or so country’s home owners would invest in energy-efficiency upgrades for their property if the State offered a tax-break incentive.

“The measure’s activity is expected to have a direct effect within months as thousands of new jobs would be created in the sector, and households that take advantage of the incentive will save considerable amounts,” Maniatis said. “It is an established fact that such energy-efficiency work offers households savings of as much as 40 percent, annually, on energy costs,” he continued.

The Energy Minister added that the building sector would receive a needed boost, as, according to his estimates, 70 percent of materials and fittings to be used in the energy-efficiency upgrades would be locally produced.

Energy Ministry deputy and PPC head at ‘Energy Dialogues’ event

Deputy Environment, Energy & Climate Change Deputy Minister Asimakis Papageorgiou has confirmed his participation at the upcoming inaugural event of “Energy Dialogues”, an initiative co-organized by energypress and the Hellenic Energy Regulation Institute (HERI).

Papageorgiou will deliver a welcome address at the event, aiming to enrich and deepen domestic public discussion on current matters concerning and influencing all aspects of the Greek energy market.

Also, the President and CEO at PPC, the Public Power Corporation, Arthuros Zervos, has just confirmed his participation, as speaker.

A host of other prominent figures of Greece’s energy sector have also confirmed their participation, as speakers, these being: Miltos Aslanoglou, Vice President at RAE, the Regulatory Authority for Energy; Loukas Dimitriou, representing the Hellenic Association of Independent Power Producers, HAIPP, locally referred to as ESAI; Pantelis Kapros, Professor at the National Technical University, NTUA, Greece’s oldest and most prestigious educational institution in the field of technology; Antonis Kontoleon, Board member at EVIKEN, the Industrial Energy Consumers Association; and Ioannis Tsipouridis, Board President of ELETAEN, the Greek Wind Energy Association, will all formulate their positions at the inaugural event.

The inaugural “Energy Dialogues” event, scheduled to take place on October 31, 2014, at Aegli, Zappeio Gardens, Athens, as part of a multi-conference titled “Capital & Vision”, will focus on the local electricity market’s restructuring with emphasis on three fields – the reshaping of Greece’s wholesale market and its compatibility with the European Target Model; NOME-type auctions; and reorganization of the capacity assurance mechanism.

Speakers at the “Energy Dialogues” series will offer detailed and substantiated answers to pre-determined questions. The speeches will be recorded and published for the creation of an archive of thought-provoking material. In order to provide access of information to sector professionals, citizens, researchers, as well as to the ever-increasing number of young scientists, the archive will be also made available through a special section to be launched on the energypress news portal.

Big investment potential in energy-efficiency building upgrades

Last Friday’s meeting between Environment, Energy & Climate Change Minister Yiannis Maniatis and Germany’s Vice Chancellor Sigmar Gabriel, the Minister of Economic Affairs and Energy, has renewed interest in a relatively recent study on energy-efficiency upgrading for buildings in Greece.

The two officials discussed the creation of a new fund for energy-related upgrades to buildings to be financed by the German investment bank KfW.

A study conducted between 2009 and 2010 by the Center for Renewable Energy Sources and Saving (CRES) – known locally as KAPE – estimated that 120,000 new jobs and investments worth 120 billion euros, over a 15-year period, could be generated by an energy-efficiency upgrade program for buildings in Greece, both domestic and commercial.

The proposal, tabled by Gabriel, would add to the involvement of KfW in the effort being made to revive the Greek economy. The German bank has already provided 100 million euros, for financial support to small and medium-sized enterprises, to one of three sub-funds that make up the Greek Investment Fund (IFG).

On a wider level, recent studies showed that energy-efficiency upgrading work on buildings could generate over two million jobs throughout Europe until 2020. Greece would benefit greatly as it is estimated that 89 percent of buildings in the country were constructed prior to 1980. It is estimated that some 3.7 million buildings in Greece have not been upgraded for increased energy efficiency.

The program being discussed, to offer low-interest loans for building energy upgrades, would be added as a fourth co-fund to the IFG.

The anticipated adoption, at an upcoming Council of Energy Ministers meeting, of a binding target to improve the energy efficiency of buildings in the European Union by 30 percent, would offer a major boost to the energy-related building upgrading industry.

 

 

 

Leading players at first ‘Energy Dialogues’ event

Key energy market institutional representatives will take part in the upcoming inaugural event of “Energy Dialogues”, an initiative co-organized by energypress and the Hellenic Energy Regulation Institute (HERI), with the aim of enriching and deepening domestic public discussion on current matters concerning and influencing all aspects of the Greek energy market.

“Energy Dialogues”, a thematic series, will be launched on October 31, 2014, at Aegli, Zappeio Gardens, Athens, as part of the multi-conference titled “Capital & Vision”. The inaugural “Energy Dialogues” session will focus on the restructuring of the Greek electricity market.

A number of prominent figures of Greece’s energy sector have confirmed their participation, as speakers. Miltos Aslanoglou, Vice President at RAE, the Regulatory Authority for Energy; Loukas Dimitriou, representing the Hellenic Association of Independent Power Producers, HAIPP, locally referred to as ESAI; Pantelis Kapros, Professor at the National Technical University, NTUA, Greece’s oldest and most prestigious educational institution in the field of technology; Antonis Kontoleon, Board member at EVIKEN, the Industrial Energy Consumers Association; and Ioannis Tsipouridis, Board President of ELETAEN, the Greek Wind Energy Association, will all formulate their positions at the inaugural event.

Officials representing PPC, the Public Power Corporation, and the electricity traders association, a newly established entity, have also been invited with their names to be announced soon.

Environment, Energy & Climate Change Deputy Minister Asimakis Papageorgiou has also confirmed his participation and will deliver a welcome address.

Speakers at the “Energy Dialogues” series will offer detailed and substantiated answers to pre-determined questions. The speeches will be recorded and published for the creation of an archive of thought-provoking material. In order to provide access of information to sector professionals, citizens, researchers, as well as to the ever-increasing number of young scientists, the archive will be also made available through a special section to be launched on the energypress news portal.

“Energy Dialogues” will be curated and coordinated by the President of the Hellenic Energy Regulation Institute, Prof. Dr Antonis Metaxas, Chair of EU Law at the University of Athens and Visiting Professor of Energy Law at the International Hellenic University.

The event will be held in close scientific cooperation with the Greek Academic Community and specialized interdisciplinary post-graduate programs with a focus on energy regulation.

 

“Energy Dialogues” to open with electricity market event

The Hellenic Energy Regulation Institute, or HERI (www.energy-regulation.eu) and Energypress have joined forces for a significant initiative aiming at enriching and deepening domestic public discussion on current matters concerning and influencing all aspects of the Greek energy market.

To be staged as a series of regular thematic events, the initiative, titled “Energy Dialogues”, will serve as a platform for public dialogue, as well as scientific, academic and technocratic exchange on prevailing Greek energy-sector issues.

As part of the event’s proceedings, energy sector specialists will offer detailed positions on pre-determined questions as a means of shedding light on fundamental issues, including ones of scientific and academic interest.

The speeches to be offered by participating academics and energy-sector officials will be documented and published for the creation of an archive of thought-provoking material. In order to provide access of information to sector professionals, citizens, researchers, as well as the ever-increasing number of young scientists, the archive will be also made available through a special section to be launched on the energypress news portal.

The event, based on similar initiatives staged by reputable foreign sector-related research institutes such as the Florence School of Regulation, and Germany’s Institute for Energy and Regulation, will aim to contribute to research and the accumulation of scientific data that will help solve energy regulation matters, while also providing guidance, based on international models, towards more creative and richer Greek public discussion, which, far too often, remains shallow and unproductive.

“Energy Dialogues” will be curated and coordinated by the President of the Hellenic Energy Regulation Institute, Dr Antonis Metaxas, Lecturer at the University of Athens and Visiting Professor of Energy Law at the International Hellenic University.

The event will be held in close association with Greece’s academic community, which has already begun offering specialized interdisciplinary post-graduate programs with a focus on energy regulation.

The inaugural “Energy Dialogues” event, scheduled to take place on October 31, 2014, at Aegli, Zappeio Gardens, Athens, as part of a multi-conference titled “Capital & Vision”, will focus on the local electricity market’s restructuring with emphasis on three fields – the reshaping of Greece’s wholesale market and its compatibility with the European Target Model; NOME-type auctions; and reorganization of the capacity assurance mechanism.

 

 

Tax on heating fuel to be reduced, PM announces

The special consumption tax (EFK) imposed on heating fuel would soon be reduced by 30 percent, Prime Minister Antonis Samaras announced over the weekend, during his speech at the opening of this year’s Thessaloniki International Trade Fair.

“This tax did not produce the desired results, while also causing significant environmental damage,” Samaras acknowledged.

The tax on heating fuel was increased a couple of years ago to the level imposed on transportation fuel, but the move backfired as a drastic reduction in consumption led to a sharp fall in tax revenues. Also, the measure prompted environmental damage as numerous cash-strapped households in densely populated urban areas turned to alternative heating solutions that, in many cases, were toxic.

The Greek Prime Minister also told the trade fair, traditionally used as a platform by political heads to announce policies for the coming year, taxpayer demands from a newly introduced single property tax, ENFIA, which replaces the so-called FAP tax and a levy paid through electricity bills, would be lowered. Tax discounts would be offered in cases where property was disconnected from the electricity grid or not generating rental income, Samaras pledged. Mistakes had been made with the new ENFIA tax, “but we’re fixing them,” Samaras conceded.

The new property tax would soon develop into a vital source for tax revenue, Samaras noted, while adding that it would be used to finance local governments.

The prime minister also said medium and high-voltage energy prices in industry would be set at the same level, the objective being to bolster local competitiveness.

During his speech, the Greek prime minister spoke of Greece’s prospective energy role in the wider region and the country’s subsequently elevated geopolitical position. Greece, in a few years from now, would develop into a major energy exporter, to European markets in need, Samaras noted.

“Up until a few years ago, nobody dared to speak of our energy wealth. Now, increasingly significant energy reserves are emerging in Greece. The first [round of] mining contracts have already been signed,” Samaras stressed. “You can understand how important all this is for creating new jobs, as well as for the upgrading of our nation’s geopolitical and geostrategic role.”

 

Greece΄s economy is on the cusp of recovery

Economic recovery in Europe requires action both on the demand and supply sides and persistence with structural reforms, European Central Bank Executive Board member Benoit Coeure said.

“What we have been saying, what particularly the ECB President (Mario Draghi) has been saying last week in Jackson Hall is that the European economy is at a point where action is needed both on the demand and the supply side,” Coeure told Greek Skai TV in an interview.

“Action on the supply side is very important. There will be no recovery if euro area countries do not move on towards structural reforms,” he said according to Reuters.

Coeure said the ECB was committed to maintaining a high level of liquidity in the European economy.

“The spur of the recovery, the fuel of the recovery will come from aggregate demand. The ECB is committed to play its part by maintaining its very accommodative monetary conditions for an extended period of time,” he said.

Coeure met Greek Prime Minister Antonis Samaras, and top officials including central bank chief Yannis Stournaras during his visit in Athens, ahead of talks between the government and its foreign lenders in Paris next month, which will kick off the country΄s next bailout review.

Greece΄s economy is on the cusp of recovery after six years of recession, expected to grow by 0.6 percent this year.

“Greece has turned the corner,” Coeure said adding that a lot remains to be done on structural reforms.

Asked about Greek banks΄ capital needs that may be revealed in the ECB΄s region-wide stress tests in October, Coeure gave no clues but said it was positive that banks had already successfully tapped capital markets.

“We don΄t know yet whether money will be needed and how much, and in any case the first line of defence will be accessing capital markets,” he said. “There should be no worry about it, they have a proven ability to access capital markets.”

Greece΄s trade deficit rose

Greece΄s trade deficit rose to 1.731 billion euros in June from 1.613 billion in June last year, for an increase of 7.4 pct, Hellenic Statistical Authority said on Monday. 

Τrade deficit grew by 32.6 pct in June excluding oil products. The value of import-arrivals totaled 4.189 billion euros in June, from 3.820 billion in June 2013, an increase of 9.7 pct, while excluding oil products the value of imports grew by 14.9 pct. 

The value of export-deliveries totaled 2.457 billion euros in June, from 2.207 billion in June 2013, for an increase of 11.3 pct, while excluding oil products the value of exports fell by 0.8 pct.  In the January-June period, the value of imports totaled 23.741 billion euros, from 23.451 billion euros in the corresponding period last year, for an increase of 1.2 pct, while excluding oil products the value of imports rose by 8.9p ct. 

Exports totaled 1312 billion euros in the first half, form 1.321 billion euros last year, a decline of 4.6 pct, while excluding oil products the value of exports fell 4.0 pct.  The country΄s trade deficit rose 9.6 pct in the January-June period to 10.614 billion euros, while excluding oil products the trade deficit jumped 25.3 pct.

Greece to reopen 3-, 5-yr bond issues in coming weeks

Greece plans to reopen its recent three- and five-year bond issues in the next two weeks to top them up by up to 1.5 billion euros ($1.97 billion), accepting T-bills as payment instead of cash, a senior government source told Reuters on Monday.

“There is a plan to reopen these issues in the next couple of weeks. Payment will be in outstanding T-bills instead of cash,” the government official said on condition of anonymity.

Athens wants to increase liquidity in this part of its yield curve, which can help to tighten bid-offer spreads, the official added.

Greece has a stock of about 15 billion euros of outstanding T-bills and refinances them on a monthly basis.

The country broke a four-year exile from bond markets earlier this year with a five-year bond issue in April and a subsequent three-year issue in July, raising a combined 4.5 billion euros from foreign investors.

Tax distortions hinder economic recovery, Alpha Bank says

The Greek economic recovery and higher employment growth are hindered by two very important and critical tax distortions, which contribute to a further decline in real estate market activity, Alpha Bank΄s analysts said.

“What is even worse is that they keep unemployment at high levels,” they said.

“These distortions are due to the imposition of the single property tax on real estate worth more than 300,000 euros along with the uniform real estate ownership tax (ENFIA) and the imposition of taxes on real estate based on their objective values, which in most cases now exceed by far the actual value of these assets,” analysts added.

Greece ’s January-June 2014 current account deficit drops

According to data provided by the Bank of Greece, the country’s current account deficit dropped 54% yoy to EUR1.1bn in the January-June period from EUR2.4bn a year ago.

Although the underlying trade balance (goods only, ex-oil & ships) was roughly unchanged (better by just EUR0.2bn yoy), the bulk of the yoy improvement should be attributed to a higher (by EUR1.2bn) surplus in services (reflecting tourism strength, with arrivals +14% yoy and tourism receipts +16% yoy), increased (by EUR0.4bn) current transfers (mostly receipts of EU structural funds) and a better incomes balance (mostly lower interest payments). These more than offset a sharply widened shipping balance (EUR1.6bn deficit vs EUR0.6bn a year ago) due to increased ship-building capex.

For June 2014 alone, Greece posted a EUR1.4bn current account surplus (vs EUR0.9bn a year ago) mostly benefiting by strong tourism (services surplus up EUR0.4bn yoy). Remember that Greece posted a EUR1.2bn current account surplus in 2013 (or 0.7% of GDP) compared to a EUR4.6bn (2.4% of GDP) deficit a year ago, highlighting progress in addressing the economy’s external imbalances and benefiting from some EUR2bn SMP profits returned by ECB/national central banks.

This was the first time in decades (allegedly since 1948) Greece records a surplus on an annual basis: as late as in 2008, the deficit was no less than EUR35bn or 15% of GDP.

Preparations for troika talks in Paris gather pace

Deputy Prime Minister Evangelos Venizelos met with PASOK officials on Monday as the party decided who would represent it at the upcoming talks between Greece and the troika in Paris, a meeting for which the government is preparing intensively.

The Socialists will send Christos Protopappas and Kyriakos Pierakakis to Paris on September 3, when Finance Minister Gikas Hardouvelis will lead the Greek delegation. Prime Minister Antonis Samaras’s adviser Stavros Papastavrou will also be part of the entourage heading to the French capital.

Samaras is yet to return from his short break in the Peloponnese as he has been suffering from back pain. However, it is he and Venizelos who will have the final say later this month on Greece’s negotiating strategy for the meeting with the troika representatives. Samaras and his aides are hoping that the Greek side will be able to return from Paris with positive results that the prime minister will then be able to stress in his speech at the Thessaloniki International Fair a few days later.

Meanwhile, it was confirmed on Monday that civil servants would not lose their jobs or suffer wage reductions if they perform poorly in upcoming public sector evaluations. The relevant amendment was published in the Government Gazette.

Bulk of Greek exports heading to the west

The wider discussion provoked by the Russian embargo on food products from the west has brought back to the fore the issue of Greek exports, which despite displaying positive signs in 2013, have retreated again in the current year, raising justified concerns about the negative trend’s impact on the national economy.

Although talk, in recent days, has focused on the impact of Russia’s wider embargo on Greece’s agricultural goods, the essence of the matter lies in a completely different field, as the majority of Greek exports concern industrial and petroleum-sector products headed for markets of the west, Turkey, as well as the Balkans. And the real problem is that Greece’s total exports figure has been experiencing a steady downward trend in recent years, except for 2013, as a result of Greece’s deindustrialization.

Figures provided by two local bodies, the Panhellenic Exporters Association and the Exports Research and Studies Center (KEEM), signify that the racket concerning the impact of the Russian embargo on Greek products does not reflect reality. Russia ranks as an insignificant export market for Greek products and does not rank among the country’s top-fifteen export destinations, official figures by the two groups showed.

Highlighting this observation, the total annual worth of Greek products exported to Russia, 406 million euro, is less than the value of Russian natural gas Greece imports each year, from Gazprom, estimated at 500 million euro.

The majority of Greek exports head for the west, while Turkey also stands as an important market. Agricultural exports make up just 17% of total Greek exports. Petroleum products are ranked first, closely followed by the manufacturing sector, whose share of Greek exports currently exceeds 40%.

In geographical terms, the greatest amount of Greek exports, in 2013, were absorbed by the EU-15, or member states making up the union until the end of 2003. Greek exports to the EU-15 were valued at 7.9 billion euro, or 29% of the total exports figure, 27.281 billion euro.

The highest-ranking EU-15 recipient of Greek exports was Italy with an 8.9% share worth 2.4 billion euro, followed by Germany, which imported 6.5%, or 1.7 billion euro, of Greece’s total exports, and third-placed UK, whose figures were 967 million euro and 3.5%.

Greece exported 7.4%, or 2.02 billion euro, of its total exports to the EU’s more recent member states, Cyprus ranking first here with 1.13 billion euro, or a 4.2% share.

The Balkan region, not including Turkey, ranked highly with Greek exports valued at 3.6 billion euro, or 13.4%, largely due to exports to Bulgaria, worth 1.39 billion, for a 5.5% share.

Despite the distance, North America remains a major export market for Greece, and is valued at 1.14 billion euro, or 4.2%. Besides the USA, which accounts for 935 million euro of the total, or 3.4%, Mexico, followed by Canada, also stand as major export markets for Greece in this region.

In terms of value, industrial products and fuels make up the majority of Greek exports. In 2013, 39.9% of Greek exports, worth 10.8 billion euro, concerned mining output, fuel, lubricants, and other related products, while 9.9 billion euro, or 36.4%, were made up of industrial products.

Agricultural products were ranked third in 2013 with a 17.4% share valued at 4.7 billion euro. Food products and livestock made up a 13.2% share, beverages and tobacco represented 2.1%, and olive oil and other related products also captured a 2.1% share.

Based on data provided last May, and in terms of market value, industrial exports gained ground in their share of total Greek exports to reach 40.62%, while the share held by agricultural products declined to 16.25%.

 

Energy sector the focus in research center’s new edition

Greece’s energy sector, the utilization of domestic oil deposits, infrastructure projects being developed to expand the country’s electricity and natural gas networks, the power interconnection of the Greek islands, projects to offer energy security and interconnection with the rest of Europe, installation of high-tech “smart” networks and meters, all stand as main priorities at the Ministry of Environment, Energy & Climate Change (YPEKA), and are presented in detail in a special “Energy” edition published by KEPE, the Center for Planning and Economic Research, which operates under the ministry’s supervision.

The development of all these domains stands to offer major employment opportunities as well as significant opportunities for a new model of economic growth that promises to reinvigorate the national economy, Greece’s Environment, Energy & Climate Change Minister, Yannis Maniatis, points out in the edition’s introductory note. The minister underlines that these opportunities “must not be lost”.

The edition, published in the Greek language, includes articles by sector authorities such as Athanasios Dagoumas, a special advisor to the Energy & Climate Change Minister; Miltiadis Aslanoglou, a member of RAE, the Regulatory Authority for Energy; Giorgos Stamtsis, the general manager at HAIPP, the Hellenic Association of Independent Power Producers; Savvas Seimanidis, the recently appointed president of EREF, the European Renewable Energies Federation, who previously was a representative at ESIAPE, the Greek Association for Electricity Producers and Renewable Energy Sources; Sotiris Kapellos, president of SEF, the Association of Photovoltaic Companies; Takis Grigoriou, an Energy and Climate Change official at Greenpeace Greece; and KEPE researcher Vassilis Lyhnaras, the KEPE energy edition’s supervisor.

“The energy sector can play an important role in the country’s development and help to attract new investment and capital from abroad, and create new jobs. At the same time, it stands as the fundamental determining factor for competitiveness and export orientation of producers in the Greek economy,” notes Lyhnaras in the edition’s foreword.

Unilateral action on energy cost possible, minister says

The Greek government could take unilateral action aimed at reducing industry-related energy costs if an agreement was not reached with the country’s creditor representatives, or troika, the Minister for Development and Competitiveness, Mr. Nikos Dendias, has noted following an inter-ministerial meeting.

“Greece has the right to legislate as a sovereign country. We are seeking an honest dialogue on energy costs. Whoever disagrees may appeal to European Courts,” the minister remarked.

His comments come amid negotiations on a number of issues that could reduce energy costs for industry, such as a measure offering consumers lower rates in exchange for their willingness to exit and enter the power system as required by demands on the supply network; a retroactive reduction of natural gas price levels through a return of profits at DEPA, the public gas company; as well as the reduction of a special consumption tax (EFK) imposed on fuel and electricity.

The president at SEV, the Hellenic Association of Industrialists, Mr. Theodoros Fessas, remarked that interventions already made to reduce labor costs were more than adequate, while adding that SEV had not asked for further cuts on this front. He was responding to a journalist’s question on labor market revisions.

However, SEV’s chief did note that non-wage costs, such as high labor taxation, were having a negative effect. “But this is something being paid by the entire economy, and employer contributions are being gradually reduced,” Mr. Fessas said. “Also, the labor minister is considering a further reduction of between 1% and 1.5%.”

No new word by PM on energy cost cuts for industrialists

Greek Prime Minister, Mr. Antonis Samaras, backed by several of his ministers, reiterated his coalition government’s position on the issue of industrial energy cost reduction, offering no new developments to representatives of the Hellenic Association of Industrialists (SEV) at a meeting in Athens yesterday.

SEV officials were told by Mr. Samaras that a measure promising industrial plants compensation for the increased cost of emission allowances had already been submitted to Parliament for ratification, which could take place today. It is estimated that this measure will collectively save industrial firms 20 million euro on an annual basis, or 140 million euro until 2020.

The Greek Prime Minister told the industrial representatives that the national economy’s gain from a deal reached with Gazprom for a reduction of natural gas prices was valued at 87 million euro. Mr. Samaras also noted that a stalled plan concerning the partial return of Public Gas Company (DEPA) profits to consumers could take effect in the near future.

The same applied for another measure intended to offer lower rates to industrial energy consumers in exchange for their willingness to exit and enter the power system as required by demands on the supply network. The Prime Minister told the SEV officials that he was hopeful of developments on this measure by October.

Mr. Samaras also noted that 80 industrial firms using medium-voltage connections had signed agreements with PPC, the Public Power Corporation, for reduced rates offering a 15% discount. The Prime Minister added that four industrial plants running on high-voltage connections had also signed new deals with PPC, while a further four were also expected to sign imminently.

From their vantage point, SEV officials, however, claimed that the government had not stuck to its word on the majority of various cost-cutting measures announced last February, whose value had been estimated at 150 million euro.

During the meeting, SEV officials reiterated their appeal for a reduction to industrial-sector energy costs, and called for a lower Special Consumption Tax (EFK) on electricity and natural gas bills for industrial consumers. Mr. Samaras and his government officials remained vague on this demand.

SEV officials reminded Mr. Samaras and his team that energy-related taxation levels in other national economies of similar proportions – they cited Portugal as an example – were limited to 20% of levels reached in Greece. Such policies were offering major comparative advantages to the export industries of competitor nations at a time when Greek firms were sinking into even deeper trouble, the SEV officials argued.

Though the government officials, at the meeting, reportedly expressed their understanding on the pressing challenges faced by Greek industry, they did not offer any specific views on future energy cost-cutting policies.

Finance Minister Gikas Hardouvelis, however, did note that Greece’s GDP contraction of 25% over the past few years of deep recession had overwhelmed the country’s industrial sector.

Privatization shortage raises prospect of ELPE stake sale

The need for a boost to the current year’s subdued inflow of funds at TAIPED, the state privatization fund, currently well below the target figure, has once again raised the prospect of the sale of a 35% stake of ELPE shares held by the Greek state, through the bourse.

TAIPED has raised less than 400 million euro from privatization revenues so far this year, well short of the target figure of 1.5 billion euro set for 2014.

The option of selling the 35% stake of ELPE is being considered as the only viable solution for raising a significant sum that could help cover most of the revenue shortfall. The derailment of this year’s privatization-funds target figure was prompted by the cancellation of tenders for the Thessaloniki Water Company, EYATH, and the Athens Water Supply and Sewage Company, EYDAP, as well as the postponement of privatization plans for Greek railway service operator Trainose, and provincial airports.

Based on last Friday’s stock exchange closing rates, ELPE’s equity value amounts to 1.85 billion euro, meaning that a 35% sale would provide 647 million euro. Such an influx would help TAIPED move considerably closer to its target figure for 2014. However, a final decision on whether this option can be pursued would depend on an agreement by the fund with the government, as well as ELPE’s main shareholder, Paneuropean Oil, a member of the Latsis corporate group.

The Latsis group moved in on ELPE back in 2003. Based on its agreement signed with the Greek government, the corporate group maintains a preferential right in the event that an additional stake of ELPE is offered for sale by the state. The group also controls ELPE’s management.

Foreign interest in ELPE has also been expressed. Gazprom, maneuvering through its petroleum division Gazpromneft, has made clear its interest in the Greek corporation. Other interested parties in ELPE have included another state-owned Russian firm, Rosneft.

 

Linking islands to mainland power system needed fast

A new round of public debate on the need to expand the coverage of the Greek mainland’s electricity supply network to the country’s islands has been rekindled over the past few days by two separate issues that have engaged local media.

Though they may, at first, seem to stand independently, both issues are of crucial importance to the country’s energy market and economy, overall.

The first of the two issues concerns the lofty costs being covered by electricity consumers as a consequence of a much-delayed plan to develop the country’s infrastructure that would connect the islands with the mainland’s power network.

The figures being tossed about, to highlight the extent of the current costs, are alarming. Electricity production on non-connected islands, at local power stations running on diesel and fuel oil, added a total of 1.55 billion euro to the power bills of PPC (Public Power Corporation) electricity consumers in 2012 and 2013. Highlighting the case further, the average cost of electricity production on the mainland in 2012 was 83 euro per MWh, while the average cost on the islands averaged between 205 euro per MWh and 1,748 euro per MWh.

The second theme that has reheated the debate for the country’s need to expand its mainland electricity supply network is the prospect of a deal between the State Grid Corporation of China, SGCC, the world’s largest state-owned electric utilities company, and Terna, the Italian electricity transmission system operator. The two firms, believed to be closing in on a deal that would provide SGCC with a considerable stake in Terna, are both taking part in an international tender for a 66% stake in IPTO (locally referred to as ADMIE), the Independent Electricity Transmission System Operator. Both firms are considered as being prime candidates. It remains unclear how the negotiations between the Chinese and Italian firms could affect their involvement in the IPTO tender, currently in progress.

At present, IPTO, a subsidiary firm of PPC, Greece’s Public Power Corporation, is completely owned by the power corporation. IPTO’s  mission is to further develop, operate, and maintain Greece’s electricity supply network.

Industry pundits have called for the swift development of projects to connect Greek islands with the mainland electricity supply network. One of these, Mr. Giorgos Peristeris, managing director at energy, construction and real estate group GEK Terna, who also heads ESIAPE, the Greek Association of Electricity Producers and Renewable Energy Sources, noted that binding, non-negotiable agreements that would produce swift results were, at this stage, far more important than issues concerning ownership of the networks.

PM, industrialists to discuss reducing energy costs

Measures for the reduction of energy costs in the industrial sector, as well as the need for adjustments to beleaguered business loans, will be tabled for discussion at a meeting tomorrow between the Greek Prime Minister, Mr. Antonis Samaras, the president of the Hellenic Association of Industrialists (SEV), Mr. Theodoros Fessas, and other ministers.

SEV’s list of appeals will include a renewed call for a reduction to the Special Consumption Tax (EFK) imposed on industrial electricity and natural gas bills. The association has been demanding a reduction to the EFK tax on industrial power and gas bills for quite some time. It remains unknown how the government will respond to this latest appeal.

Tomorrow’s meeting, to also include the participation of top-ranked officials from the Finance Ministry, the Environment, Energy & Climate Change Ministry, and, possibly, the Labor Ministry, comes as a lead-up to an interministerial committee, scheduled to convene on Thursday at the Development and Competitiveness Ministry, for talks on measures needed to bolster the industrial sector’s standing.

Another crucial topic on tomorrow’s agenda, at the meeting between the Prime Minister, SEV, and other ministers, concerns a plan being worked on at the Development Ministry to deal with unserviced business loans, or “red loans”, as they are being locally referred to. The plan entails reaching an agreement with banks by September, at the latest, as a means of injecting badly needed cash into the market, through robust enterprises. The details behind this plan concern establishing a mechanism for optional out-of-court settlements that would enable enterprises to negotiate agreements with creditors, including banks, the public sector, social security funds, and individuals.

As for energy issues, an amendment that was tabled last Friday for an Environment, Energy & Climate Change Ministry bill, has given the green light for the implementation of a mechanism intended to offset the cost of purchasing carbon credits. Through this plan, industrial enterprises are expected to receive 20 million euro, annually, from this year until 2020.

EU Commission approves COSCO investment in Piraeus

The European Commission gave the “green light” to Greece for COSCO’s new investment in Piraeus, as according to sources, the Competition Commission and the Internal Control Commission of the European Union approved a friendly settlement agreement between COSCO’s subsidiary and Piraeus Port Organization (OLP), overcoming the biggest hurdle to expanding Greek-Chinese cooperation in the port of Piraeus.

Αccording to AMNA, under the agreement reached between SEP SA (a subsidiary of COSCO) and Piraeus Port, the Chinese company will invest an additional 230 million euros, offering huge benefits to the country as it doubled not only the value of the investment but the number of new jobs, creating another 700 jobs and 1,500 jobs indirectly. The sources said the agreement started from scratch and was signed in a record time of only five months.

The approval paves the way for the biggest foreign direct investment in Greece since the crisis began.

HFSF sees manageable (if any) capital needs for Greek banks from ECB stress test

In an interview to Sunday’s Kathimerini newspaper, HFSF’s chief executive Ms Sakellariou said that Greek banks’ capital shortfalls (if any) arising from the ECB’s comprehensive assessment (AQR and stress test) underway will be manageable (implying the private sector will fully cover any capital needs), refraining however from providing any further indications. 

Out of EUR50bn funds it was originally endowed with, the HFSF has already injected EUR25.5bn to the 4 systemic banks and used some EUR14.4bn for the cleaning up of non-systemic ones. Including some recoveries so far, it has been left with some EUR11.5bn available resources. 

Given that the current market value of HFSF holdings in the 4 systemic banks aggregate to cEUR18bn and another EUR2bn are likely to be recovered from ‘bad banks’, Ms Sakellariou expects the HFSF to recoup more than EUR30bn (out of the original EUR50bn) in total, way above the EUR16bn recovery estimate which the Troika (EU/IMF) has built in current projections for public debt.

ΒοG: Two thirds of Greek enterprises face problems in debt servicing

Two thirds of Greek enterprises are facing problems in servicing their loans, while at least one third of enterprises are in a fully healthy condition and enjoy significant growth prospects, the Bank of Greece said.

According to AMNA, in an announcement, the central bank said that a number of enterprises, with debts accounting to around 20 pct of total loans, were in a not healthy condition.

These findings were presented during a workshop meeting organised by the central bank in July 11 to discuss the situation in corporate loans facing repayment problems. The discussion came to the conclusion that a debt settlement would contribute largely to a restructuring of the whole system, allowing enterprises that survived the crisis to grow more. A discussion on legal problems focused mostly on the bankruptcy code. Participants said that the current bankruptcy code was not supportive to efforts towards a corporate debt restructuring. The central bank noted that special situations, such as the current crisis, were tackled using emergency measures worldwide and not with existing ones, as the international experience showed in the Far East, Argentina and in European countries.

Greece reports primary surplus of 707 mln euros in H1

Greece reported a primary budget surplus of 707 million euros in the first six months of the year from a primary deficit of 1.511 billion euros in the corresponding period in 2013, up compared with a budget target for a primary surplus of 635 million euros in the January-June period.

A Finance ministry announcement said that according to final data on budget execution, on a amended cash basis, the state budget recorded a deficit of 2.419 billion euros in the first six months of the year, from a deficit of 4.991 billion euros last year, down from a revised budget target for a deficit of 3.856 billion euros, AMNA reported.

Net state budget revenues totaled 23.615 billion euros in the first half, up 1.0 pct from a revised budget target, while regular budget net revenues totaled 20.646 billion euros, up 0.3 pct from revised targets.

Tax revenues totaled 19.021 billion euros, up 0.5 pct from a revised target, while tax returns totaled 1.558 billion euros, up by 96 million euros compared with targets.

Public Investment Program revenues totalled 2.969 billion euros in the January-June period, up 176 million euros compared with targets.

State budget spending totalλed 26.034 billion euros, down 1.195 billion euros from a revised target, while regular budget spending totaled 23.672 billion euros, down 1.240 billion from revised targets. Regular budget spending were down 8.2 pct compared with the same period last year, reflecting a 6.3 pct decline in primary spending.

Public Investment Program spending totaled 2.362 billion euros, up 44 million from targets and up 590 million euros compared with the same period last year.

Energy Minister: Need for energy-efficient, circular economy

The right path to the future leads to an energy-efficient and circular economy, Greece’s Environment, Energy & Climate Change Minister, Mr. Yannis Maniatis, told an informal meeting of EU environmental ministers in Milan yesterday.

Environmental and climate change policies, the minister noted, offer the greatest potential for job creation and opportunities for economic growth, as exemplified by areas such as waste and efficient use of resources and energy in buildings.

“This should be reflected in the EU Strategy for 2020. The interim evaluation stands as a unique opportunity to strengthen the environmental dimension of this strategy and to increase integration of green policies in the European Semester. This requires more active participation by the Environment Council in the governance process,” Mr. Maniatis concluded.

Current EU policies, Mr. Maniatis noted, were developed within the framework of the European Strategy for 2020, accepted as the dominant European strategy instead of the Strategy for Sustainable Development, which pursues a more holistic approach.

“Although the strategy for 2020 aims for growth and jobs, it is, in practice, focused on austerity measures in order to achieve the reduction of national debt levels and to counter fiscal and economic challenges,” noted Mr. Maniatis, who added that the approach was causing very serious problems for several member states.

Mr. Maniatis also pointed out that the EU strategy for 2020 has failed to adequately incorporate social and environmental dimensions. “We allow the economy, as measured by GDP, to be the primary objective and not the means.”

Athens Stock Exchange: Moderate drop

Equity prices were falling this morning on the Athens Stock Exchange (ASE). The basic share price index went down 0.22%, standing at 1,187.42 points at 11.00 a.m. with a turnover at 6.30 million euros.

The FTSE/ASE 20 index for blue chip and heavily traded stocks decreased by 0.28%, and the FTSE/ASE MID 40 index was down 0.78%.

The biggest gains on individual sector indices were noted in Media that went up 3.39%, Technology that went up 1.39% and Financial Services that went up 0.70%.

Losses were mainly noted in Real Estate that fell by 1.65%, Food and Beverages down 1.22% and Oil down 0.71%.

25 stocks traded went up, 23 went down and 13 remained unchanged.

Samaras calls for acceleration of privatisations

In a meeting including the Government Vice-President and Foreign Minister Evangelos Venizelos, as well as Finance Minister Gikas Hardouvelis at the Maximos Mansion government headquarters on Monday, Premier Antonis Samaras set the issue of accelerating privatizations.

According to AMNA, Hardouvelis went to the Maximos Mansion immediately after concluding a 3.5 hour-long meeting with the representatives of Greece΄s lenders – known as the troika – which focused mainly on privatisation delays and downwards revisions of yearly targets. According to people with knowledge of the troika deliberations, Monday΄s discussions proved productive.

The government is hopeful that by sticking to the budget – attaining its targets – will help it negotiate with the troika in the autumn on possible tax relief measures. The troika is currently scrutinizing the budget, looking into its progress, as well as the projection of its data into the future. Both the government and the troika appear to be primarily concerned with the ways in which the old vicious circle of the economy can be transformed into a virtuous one, so as to assist Greece΄s recovery.

The troika also met on Monday evening with Education Minister Andreas Loverdos, having discussed the staff evaluation issue, as well as the common programme of the Education and Labour ministries regarding professional training and apprenticeship.

Troika satisfied with energy market reforms

Greece’s creditor representatives, or troika, expressed satisfaction over all topics linked to the bail-out agreement’s obligations for interventions in the energy sector during a meeting with Ministry of Environment, Energy & Climate Change officials yesterday morning, ministry sources said.

The prospective part-privatization of the public power corporation, PPC, whose break-away division is being referred to as “Little DEI”, was one of the main subjects discussed during the latest round of talks between the two sides. Legislation for the part-privatization was ratified in Parliament last week.

Another dominant item on the agenda was the progress being made in the privatization procedure for IPTO (locally referred to as ADMIE), the Independent Electricity Transmission System Operator, which has now reached its second stage. Four of the five bidders have qualified for the procedure’s next round, entailing the submission of binding bids.

As for the overall package of reforms aimed at fully liberalizing the electricity and natural gas markets, negotiations continued yesterday, and, according to ministry officials, the country’s creditor representatives did not raise objections about delays observed in the schedule’s progress.

According to the same sources, the troika appears to have accepted a slight shift forward of a Memorandum deadline for the submission to Parliament of legislation aimed at ending gas supply company monopolies in the retail market. The original deadline had been set for June, 2014, but has now been reset for September of the same year.

As for the electricity market, the troika focused mostly on the NOME-type auctions for lignite and hydropower production by PPC, which, based on the bail-out agreement with creditors, will need to be enforced as of September, 2014.

CO2 compensation for industry approved

The European Commission’s Directorate General for Competition has approved a request submitted by Greece’s Ministry of Environment, Energy & Climate Change (YPEKA) for the compensation of indirect costs related to carbon dioxide emissions (CO2).

“Reducing the cost of energy for the industrial sector is a definite objective and intention at the ministry, so that we can bolster its competitiveness, defend and create new jobs,” noted the Environment, Energy & Climate Change Minister, Mr. Yannis Maniatis. “Approval of the measure for compensation of indirect costs concerning CO2 emissions not only reduces the energy cost for industries, but also offers protection against large and sudden CO2 price fluctuations. It is a long-term measure that is valid until 2020, and is consistent with the ministry’s policy for structural and long-term changes in the energy market, which will reduce the overall energy cost for industry and the average consumer.”

The ministry had submitted a request to the Directorate General for Competition in mid-April concerning the strengthening of industries exposed to greater carbon-leakage risk as a result of indirect costs of emissions resulting from the implementation of the European Union’s Emissions Trading System.

The aid concerns sectors covered by the relevant guidelines for state support. The measure’s cost is estimated at between 15 and 20 million euro per year for the period 2013 to 2020.