241 Posts in Economy

The EU and the International Monetary Fund (IMF) together lent Greece more than 260 billion euros during its decade-long debt crisis which began in late 2009, in exchange for tough austerity measures. The country's third bailout expired in 2018. "On Dec. 15, we will repay earlier than expected 5.3 billion euros to euro zone countries," an official who spoke on condition of anonymity told Reuters, adding that the payment refers to loans maturing in 2024 and 2025. Greece recently regained its investment grade credit rating after languishing for 13 years in the "junk" category. Last year, it paid off the IMF, which provided it with 28 billion euros between 2010 and 2014 - two years ahead of schedule. It also repaid early 2.7 billion euros to euro zone partners as part of efforts to improve its debt sustainability, and hopes to continue on the same path in 2024. "We might repay earlier more bilateral loans next year," a second official told Reuters, without giving more details on the amount or the timing. Eurozone countries lent Greece 53 billion euros in bilateral so-called Greek Loan Facility (GLF) loans during its first bailout, with maturities extending to 2041. With the planned payment this year, Greece will have repaid a total of about 13 billion euros. Since emerging from bailouts in 2018, Greece has relied solely on bond markets to cover its borrowing needs. It plans to borrow about 7 billion euros next year. It has a liquidity buffer of more than 35 billion euros due to higher than expected tax revenues, strong growth and primary surpluses. Greece sees economic growth at 2.9% in 2024 following a 2.4% expansion this year, more than twice the eurozone average. It also hopes to achieve a 2.1% of GDP primary budget surplus next year on higher investment and strong tourism revenue. ($1 = 0.9168 euros)

Positive preliminary assessment of Greece's 3rd payment request of 3.64 bln The European Commission endorsed a positive preliminary assessment of Greece's third payment request of 3.64 billion euros (1.69 bln in grants and 1.95 bln in loans), under the Recovery & Resilience Facility (RRF). On May 16, Greece submitted to the Commission a payment request for grants, based on the achievement of the 39 milestones and three targets selected in the Council Implementing Decision for the third instalment for grants. On November 22, Greece also submitted a payment request for loans concerning the achievement of one target. Targets also include a series of reforms to enhance efficiency in public administration, including through establishing a multi-level governance system that will streamline the allocation of responsibilities between central, regional and local authorities, and to enhance the fight against corruption and smuggling. Other reforms include addressing weaknesses in urban planning, promoting the upskilling for employees and the unemployed, and establishing a regulatory authority to enable a more rational and effective waste management system and more sustainable management of water resources. Also, introducing fair and transparent procurement for public urban and regional passenger transportation services and improve the regulatory framework for industrial parks. The one target covered by the payment request for loans required the signature of at least 3.5 billion euros of RRF loans between financial institutions and companies to support private investment related to the green transition, digitalisation, increasing export capacity, economies of scale and innovation. Approval of reintroduction of 'Hercules' scheme to reduce Greek banks' NPLs The European Commission has approved the reintroduction of a Greek scheme, known as ‘Hercules', aimed at supporting the reduction of non-performing loans of Greek banks, as it does not involve State aid, the European insitution announced on Tuesday. Commissioner in charge of competition policy Didier Reynders noted that the Hercules scheme "has already successfully contributed to the lifting of the burden of non-performing loans from the balance sheets of Greek banks," and that its reintroduction "will now enable Greece to provide further market conform guarantees that do not distort competition." In turn, he added, this will allow Greek banks to concentrate on contributing to the growth of the Greek economy. The scheme is a re-introduction of a measure that the Commission initially approved in October 2019 for a duration of 18 months and prolonged in April 2021, which expired on October 9, 2022. Greece notified its plans to re-introduce the scheme, which will run until the end of December 2024. Approval of 80 mln Greek state aid for natural disaster damage in agricultural sector The European Commission has approved, under EU State aid rules, an 80-million-euro Greek scheme to compensate damages from natural disasters and adverse climatic events in the agricultural sector, it was announced also on Tuesday. The scheme is aimed at supporting farmers who have sustained damage to their crop and livestock production or to their fixed assets, stored products and production equipment due to unforeseen events. Such unforeseen events include natural disasters such as earthquakes, landslides, floods, avalanches, tornadoes, volcanic eruptions, Mediterranean cyclones and wildfires. This also includes adverse climatic events which can be assimilated to a natural disaster, such as storms, hail, ice, windstorm, heavy or prolonged rainfall, high temperatures, snowfall and severe drought. Under the scheme, which will run until December 31, 2027, the aid will take the form of direct grants. The maximum amount of aid per beneficiary is 200,000 euros.

The development is a blow to Russia as it narrows the number of shipping firms that are ready to transport Russian oil to consumers in Asia, Turkey, the Middle East, Africa and South America - although traders said Moscow still had enough shipping firms for now. Greek shippers Minerva Marine, Thenamaris and TMS Tankers have stopped transporting Russia oil in recent weeks, the four traders said. Thenamaris said it doesn't comment on commercial matters. Minerva Marine and TMS Tankers didn't respond to requests for comment. All 3 firms were active shippers of Russian oil and fuels up until September-October when they started scaling down their involvement, according to the traders and data from shipping agents seen by Reuters. All 3 companies turned down requests for vessels for Russian crude loading in November and later, said the traders, who previously collaborated with the three firms. The Greek shippers' exit from the trade followed tighter U.S. sanctions imposed on Russian oil shipments. In October, Washington imposed the first sanctions on owners of tankers in Turkey and the United Arab Emirates carrying Russian oil above the G7's price cap of $60 a barrel. Last week, it imposed sanctions on three more ships. The G7 countries introduced a price cap on Russian oil in late 2022, but had not previously enforced it. The price cap allows Western firms to provide shipping and insurance services for Russian crude as long as the oil is sold below $60 per barrel. The cap is designed to limit Russian export revenues. Russia's main export grade, Urals, has been trading above the $60 per barrel cap since mid-July amid production cuts by the OPEC+ group of oil producing countries, prompting many market watchers to say the price cap wasn't working. Russia's Pacific ESPO Blend crude oil grade has also traded above the cap, according to U.S. Treasury data. The three Greek firms had been shipping Russian oil for decades and continued to do so when most other Western companies quit running the routes to avoid rising sanction risks and the imposition of the price cap. The routes have been lucrative. Russian oil trade has brought record revenues over the past year to the shippers who took the risk and stayed in the business. Freight rates for Russian oil transportation jumped to as high as $15 million per tanker voyage from Baltic ports to India last winter as shippers charged high rates because of the risk. That was several times more expensive than shipments of non-sanctioned crude. The three Greek companies operate more than 100 oil tankers capable of handling almost all the oil exports from Russia's European ports of Primorsk, Ust-Luga and Novorossiisk of roughly 10 million tonnes a month or 2.4 million barrels per day. They also operate a fleet of smaller tankers that transport fuel. "The dark fleet might not be enough to transport all of Russian oil," one of the traders involved in Russian oil shipping said, referring to the emergence of the so-called "dark fleet" of shippers that move oil from sanctions-hit Russia and Iran and are not covered by Western insurance. He cited as the main reason the fact that the Russian oil was now travelling 8-10 weeks to reach customers in Asia as opposed to two weeks before sanctions, when oil was sold in Europe. That means more tankers are required for the trade. However, for now Russia appears to be coping as other shipping companies stepped in, traders said. Russia is now relying on its shipping company Sovcomflot and a many little-known shipping firms registered in the UAE, India, Hong Kong, Seychelles, Ghana and other locations, according to traders and shipping data. The vessels carry flags of different states from Liberia to the Cook Islands.  

More specifically, in 2022, apartment prices increased at an average annual rate of 11.9% (revised data), compared with an average increase of 7.6% in 2021.In the third quarter of 2023, the year-on-year rate of increase in prices was 11.6% for new apartments (up to 5 years old) and 12.2% for old apartments (over 5 years old). According to revised data, in 2022 prices of new apartments increased on average by 12.4%, against an increase of 8.2% in 2021, whereas prices of old apartments increased by 11.5% in 2022, against an increase of 7.2% in 2021. Broken down by region, in the third quarter of 2023 apartment prices increased year-on-year by 12.0% in Athens, 15.4% in Thessaloniki, 12.8% in other cities and 9.5% in other areas of Greece. For 2022 as a whole, prices increased on average by 13.9%, 12.6%, 10.9% and 8.2% respectively in the above-mentioned areas (revised data). Finally, as regards all urban areas of the country, in the third quarter of 2023 apartment prices are estimated to have increased on average by 12.1% year-on-year, while for 2022 they increased at an average annual rate of 12.3% (revised data).

The Development Ministry said Johnson & Johnson Hellas was fined 1 million Euros and Colgate-Palmolive Hellas 672,000 Euros. It didn’t provide further details on the alleged breaches. The fines were imposed under a law adopted in July that caps gross profits for a broad range of key consumer goods and services — mostly in the food and health sectors — until the end of 2023. The law stipulates that the gross profit per unit cannot exceed that from before Dec. 31, 2021. Successive polls have identified the cost-of-living crisis, largely triggered by the war in Ukraine, as a major concern for most Greeks, with the overwhelming majority saying it has forced them to reduce purchases of basic goods. Together with food and other consumer products, housing costs in Greece have risen sharply. The issue has piled pressure on the center-right government, which secured a second term in a landslide election victory in June. Development Minister Costas Skrekas said Wednesday that fighting high prices was “a top government priority,” and promised constant market checks to ensure the profit cap is implemented. On Nov. 2, the ministry fined the Greek branches of Procter & Gamble and Unilever 1 million euros each for allegedly breaching the gross profit cap. October’s rate of inflation was 3.4% on the year, according to the country’s statistical authority, down from 9.1% a year earlier.

In initial projections, the OIV pegged world wine output, excluding juices and musts, at between 241.7 million and 246.6 million hectolitres (mhl), with a mid-range estimate of 244.1 mhl. This would be 7% lower than last year and the smallest since 1961 when it had fallen to 214 mhl, the OIV said. A hectolitre is the equivalent of 133 standard wine bottles. “This negative scenario can be attributed to significant declines in major wine-producing countries in both Hemispheres,” the OIV said in a statement. “While in the Southern Hemisphere, Australia, Argentina, Chile, South Africa, and Brazil recorded year-over-year variations between -10% and -30%, in the Northern Hemisphere, Italy, Spain and Greece are the countries that suffered the most from bad climatic conditions during the growing season,” it said. OIV expects Italian wine production to drop 12% to 44 mlh, its lowest level since the poor harvest of 2017. The tumble means Italy will lose its position as the world’s largest wine producer, with France set to reclaim the number one spot for the first time in nine years. Drought-hit Spain kept its position as the third largest wine producer despite its production set to fall to the lowest in the last 20 years, down 14% fall in output from last year and down 19% on the five-year average. The sharp fall in Italian and Spanish production would lead to a 7% drop in EU output this year at 150 mhl, the third lowest production level since the beginning of the century. US wine output, the world’s fourth largest, was expected at 25.2 mhl this year, an increase of 12% from 2022. Cool temperatures and heavy winter rains in the Napa and Sonoma regions brought much-needed moisture to the vines after several years of drought, the OIV said.  

After injecting about 50 billion euros ($54 billion) to prop up Greece's four largest lenders in return for shares during the country's decade-long debt crisis which ended in 2018, state-controlled bank bailout fund HFSF started divesting its stakes last month. Eurobank (EURBr.AT) was the first to end the state's participation in its share capital in October, days before S&P Global became the first among the “big three” rating agencies to upgrade Greece to investment-grade status, which it lost in 2010. On Monday, HFSF concluded the sale of a 9% stake in Alpha Bank to UniCredit and announced plans to sell a 20% stake in NBG. A book-building process and a public offering for the sale of the NBG stake which started on Nov. 14 concluded on Thursday, with the final offer price set at 5.30 euros a share, the source said. HFSF, which owns 40% in NBG, sold a total of 201,237,334 shares, raising more than 1 billion euros, according to Reuters calculations. Earlier on Thursday HFSF said that orders at less than 5.30 euros would "most likely not be considered" for allocation, having announced that it planned to increase the stake on offer to about 22% from 20% on the back of strong demand. Fidelity, Blackrock, Norges, Lazard, RWC and Allianz were among the investors who bought NBG shares.

"Demand covered 6.2 times the shares offered," the source involved in the process said on condition of anonymity. After injecting about 50 billion euros ($54.37 billion) to prop up Greece's four largest lenders in return for shares during the country's decade-long debt crisis which ended in 2018, state-controlled bank bailout fund HFSF started divesting its stakes last month. Eurobank (EURBr.AT) was the first to end the state's participation in its share capital in October, weeks before S&P Global became the first among the “big three” rating agencies to upgrade Greece to investment-grade status, which it lost in 2010. On Monday, HFSF concluded the sale of a 9% stake in Alpha Bank to UniCredit and announced plans to sell a 20% stake in NBG. The shares in NBG, Greece's second-largest bank by market value, are being sold via a public offering and a private placement from Nov. 14-16 at between 5 and 5.44 euros per share. The value of the 20% stake is estimated at about 1 billion euros ($1.09 billion). HFSF currently holds a 40.4% stake in NBG and a 27% holding in Piraeus Bank, (BOPr.AT), Greece's third-largest lender. It has said it would aim to dispose of all its holdings in Greek banks before the end of 2025. A source told Reuters on Monday that out of the 20% stake in NBG, 17% would be offered to funds and 3% to retail investors. If there was strong demand, HFSF would consider increasing the stake on offer to 22%. JP Morgan, Goldman Sachs, Morgan Stanley and UBS have been appointed as global coordinators of the sale. ($1 = 0.9196 euros)

The transaction followed the completion of a competitive process launched by HFSF on 30 October 2023, triggered by a binding offer from UniCredit for the acquisition of the shares received by HFSF, on 23 October 2023. UniCredit purchased all of the Shares at a price of 1.39 per share, representing a premium of 9.4% to the undisturbed closing price of the shares on the Athens Stock Exchange on 20 October 2023, being the last business day prior to the receipt of the UniCredit offer, and a discount of 0.4% to the closing price of the shares on the Athens Stock Exchange on 10 November 2023. Lazard Frères SAS acted as Disposal Advisor and Rothschild & Co acted as Divestment Strategy Advisor. Skadden, Arps, Slate, Meagher & Flom (UK) LLP and Kyriakides Georgopoulos Law Firm acted as external legal counsel to HFSF. HFSF announces public offer of 20% equity stake in National Bank of Greece Hellenic Financial Stability Fund (HFSF) on Monday announced that a board meeting approved the the offering to the public in Greece of a 20% equity stake in National Bank of Greece, with an upsize option of up to 182,943,031 shares at an offer price of 5-5.44 euros per share. In an announcement, HFSF said that the Bank is not offering any shares in the Offering and will not receive any proceeds from the sale of the Offer Shares, the net proceeds of which will be received by the Selling Shareholder. The Offer Shares will be offered: (a) in Greece, to retail and qualified investors, pursuant to a public offering in accordance with Regulation (EU) 2017/1129 of the European Parliament on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, the applicable provisions of Law 4706/2020 and the implementing decisions of the Board of Directors of the Hellenic Capital Markets Commission; and (b) outside Greece, pursuant to private placements to (a) persons reasonably believed to be qualified institutional buyers in the United States of America and (b) certain other institutional investors outside the United States. The EBB shall remain open during the Greek Public Offering period (i.e. from 14 November 2023 until 16 November 2023) as of 10:00 Greek time, and until 17:00 Greek time, apart from the last day of the Greek Public Offering period, i.e. on 16 November 2023, on which it will close at 16:00 Greek time. OFFER PRICE The Offer Price for each Offer Share, which may not be lower than 5.00 or higher than 5.44 euros per Offer Share, and which will be identical in the Greek Public Offering and the International Offering, will be determined by the Selling Shareholder based on the result of the International Offering after the close of the book building period for the International Offering on or about 16 November 2023. The Offer Price will be the same for all investors participating in the Greek Public Offering. EUROXX Securities S.A. is acting as Greek Public Offering Advisor and National Securities is acting as Greek Public Offering Coordinator and Lead Underwriter for the Public Offering.

Lidl Hellas CEO Martin Brandenburger said late on Thursday that the investment programme for the next three years (2024-2026) includes new stores and total investments of over 120 million euros for the store network and warehouses. Presenting the footprint of Lidl Hellas in the Greek market, he said that "in 2022 the total added value we offered to the Greek economy was 953 million euros, which corresponds to 0.46% of GDP. For every 1 euro of our direct contribution to GDP, an additional 3.89 euros of added value is created in the Greek economy. At the same time, we offer more and more jobs throughout Greece. Today we offer more than 33,000 total jobs in the country. Last year alone we created around 200 new positions."

After injecting about 50 billion euros ($53 billion) to prop up Greece's largest banks during its decade-long economic crisis in return for shares, the state-controlled Hellenic Financial Stability Fund (HFSF) this year decided to start selling the shares as the lenders have been recovering. HFSF last month sold a 1.4% stake in Eurobank back to the bank and invited investors to submit bids for a 9.4% stake in Alpha Bank (ACBr.AT), which UniCredit also wants to acquire. HFSF currently holds a 40.4% stake in NBG, with a market value of 4.9 billion euros, and a 27% stake in Piraeus Bank (BOPr.AT). "The ongoing process for the Alpha Bank's stake (sale) will not delay the sale of National Bank's shares, planned for the coming weeks," one of the sources told Reuters. A second source said there was strong interest from international investors for the stake in NBG. Greece has been attracting significant investment in recent years as its economy has been recovering after three international bailouts that kept it afloat and ended in 2018. S&P Global upgraded the country's credit rating to investment grade last month. Greek banks expect strong profits this year and hope to pay out dividends in 2024 for the first time since 2010, when the country's debt crisis erupted.

Alpha Bank, Greece’s fourth-largest lender by market value, reported net earnings of 491 million euros, up 59% from the first nine months of 2022. Its net interest income increased 45.8% to €1.34 billion, as the margin rose to 2.3% from 1.7% a year earlier. Alpha Bank said last month that Italian bank UniCredit would become its biggest investor by buying a 9% stake owned by Greece’s bank bailout fund. “[It is] the first investment by a large European strategic player in the Greek banking sector since the onset of the sovereign debt crisis over a decade ago,” said Alpha Bank’s Chief Executive Vasilis Psaltis.             Alpha Bank’s nonperforming loan exposure ratio (NPE) fell to 7.2% of its total loan portfolio from 7.6% at the end of September last year. It plans to reduce it to 4% by 2025. Piraeus, 27% owned by the country’s bank rescue fund, reported adjusted earnings of €721 million for the 9-month period, up from €331 million a year earlier. Its net interest income jumped 59% to €1.46 billion, while its NPE ratio fell to 5.5% of total loans from 8.8% at the end of September 2022.