All posts by Yiannis Seitanidis

Yiannis Seitanidis is a journalist, chief finance editor of Cypriot daily newspaper "Politis". Member of Journalists Union of Cyprus. Member of Journalists Union of Macedonia and Thrace Daily Newspaper. Member of the European Federation of Journalists. Member of the International Federation of Journalists.

Syria: EU extends sanctions against the regime by one year

On 29 May 2017, the Council extended EU restrictive measures against the Syrian regime until 1 June 2018. This decision is in line with the EU strategy on Syria, which states that the EU will maintain its restrictive measures against the Syrian regime and its supporters as long as the repression of civilians continues.

At the same time the Council added to the list of those under restrictive measures 3 ministers of the Syrian government, and updated the information related to certain persons and entities on the list. It now includes 240 persons and 67 entities targeted by a travel ban and an asset freeze over the violent repression against the civilian population in Syria.

The sanctions currently in place against Syria include an oil embargo, restrictions on certain investments, a freeze of the assets of the Syrian central bank within the EU and export restrictions on equipment and technology that might be used for internal repression, as well as on equipment and technology for monitoring or interception of internet or telephone communications.

The EU remains committed to finding a lasting political solution to the conflict in Syria under the existing UN-agreed framework. As stated in the EU strategy on Syria adopted in April 2017, the EU believes that there can be no military solution to the conflict and strongly supports the work of the UN Special Envoy and the intra-Syrian talks in Geneva.

As the leading donor in the international response to the Syrian crisis with over €9.4 billion from the EU and member states collectively allocated in humanitarian and development assistance since the start of the conflict, the EU continues to support the delivery of humanitarian aid to all Syrians, including those who are under siege or in areas which are hard to reach.

The EU will be ready to assist in the reconstruction of Syria only when a comprehensive, genuine and inclusive political transition, negotiated by the Syrian parties in the conflict on the basis of UN Security Council Resolution 2254 (2015) and the 2012 Geneva Communiqué, is firmly under way.

#Eurogroup, Agenda highlights

The Eurogroup 0f December 5th will discuss draft budgets of the euro area member states, will be briefed on the ongoing second review of the Greece’s economic adjustment programme and will adopt its work programme for the 1st half of 2017.

Meeting information_preview

Budgetary plans and prospects

At its morning session, which starts at 10.30, the Eurogroup will discuss the euro area member states’ draft budgetary plans for 2017. It will also look into the budgetary situation and budgetary prospects in the euro area as a whole.

The discussion on draft budgetary plans will be based on the European Commission’s opinions on these plans, published on 16 November.

The Commission evaluated the plans’ compliance with the rules of the Stability and Growth Pact (SGP) and assigned them to one of the following three categories:

  • compliant (Germany, Estonia, Luxembourg, Slovakia and the Netherlands)
  • broadly compliant (France, Ireland, Latvia, Malta and Austria)
  • at risk of non-compliance (Belgium, Cyprus, Finland, Italy, Lithuania, Portugal, Slovenia and Spain)

Ministers of the member states whose plans are considered to be at risk of non-compliance will be expected to explain how they intend to meet the SGP targets.

Greece’s draft budgetary plan is not being evaluated in this exercise because it is assessed separately, as part of Greece’s ongoing macroeconomic adjustment programme.

To ensure better coordination of national fiscal policies, the euro area member states have to submit their draft budgetary plans for the European Commission’s evaluation between 1 and 15 October each year.


The Eurogroup will be briefed by the institutions on the state of play of the second review of the economic adjustment programme, following the review mission which took place mid-November.

Depending on the progress achieved in the context of the second review, the Eurogroup may return to the issue of debt-related measures and the IMF’s involvement in Greece’s programme.

The second review focuses on Greece’s budget for 2017, its medium-term fiscal strategy and the labour market reform.

Eurogroup work programme

The Eurogroup will adopt its work programme for the first half of 2017.

#OECD Make better use of fiscal initiatives to escape low-growth trap

Expansionary fiscal initiatives and maintaining trade openness are needed to push the global economy out of today’s low-growth trap, according to the OECD’s latest Global Economic Outlook.

“In light of the current context of low interest rates, policymakers have a unique window of opportunity to make more active use of fiscal levers to boost growth and reduce inequality without compromising debt levels. We urge them to do so,” Mr Gurría said. 

The Outlook projects that well targeted public spending initiatives could catalyse private economic activity and help to get the global economy out of the low-growth trap. The ongoing or projected shift in the fiscal stance in a number of major economies accounts for much of the modest increase in global growth to 3.3% in 2017 and 3.6% in 2018.

Among the major advanced economies, activity is expected to accelerate in the United States, due to an assumed easing of fiscal policy, with the economy projected to grow by 2.3% in 2017 and 3% in 2018. The euro area will grow at a 1.6% rate in 2017 and by 1.7% in 2018. In Japan, growth is projected at 1% in 2017 and 0.8% in 2018. The 35-country OECD area is projected to grow by 2% in 2017 and 2.3% in 2018, according to the Outlook.

 With rebalancing continuing in China, growth is expected to continue drifting lower, to 6.4% in 2017 and 6.1% in 2018. India’s growth rates are expected to hover above 7.5% over the 2017-18 period, but many emerging market economies will continue to grow at a more sluggish pace.  The deep recession in Brazil is expected to end in 2017, after which the economy will grow at a 1.2% rate in 2018.

 The Outlook draws attention to conditions that create a “window of opportunity” for new fiscal initiatives, as extraordinarily accommodative monetary policy has led to very low interest rates and created fiscal space.  A targeted annual increase in public spending of ½ percent of GDP could be financed for several years in most countries without increasing the debt-to-GDP ratio in the medium term. Combining this initiative with structural reforms, and acting collectively across countries, would boost the impact, according to the Outlook.

 “This is not a blank cheque for governments,” Mr Gurría said. “The OECD is calling for fiscal policy to be used more wisely, with spending targeted at areas that boost growth, like high-quality infrastructure investment, innovation, education and skills, which also make growth more inclusive.”

 The Outlook identifies a number of financial risks where exchange rate and capital flow volatility coupled with pricing distortions are exposing the vulnerability of corporate balance sheets, particularly in emerging markets, and challenging bank profitability and the long-term stability of pension schemes in advanced economies. 

 An increase in protectionism could risk impairing already weak growth in global trade.

 “Protectionism and the inevitable trade retaliation would offset much of the positive effects of proposed fiscal initiatives on domestic and global growth,” said OECD Chief Economist Catherine L. Mann. “It would also likely raise prices, harm living standards and leave countries in a worsened fiscal position. Trade protectionism may shelter some jobs, but it will worsen prospects and lower well-being for many others.”

 The Outlook calls on governments to avoid protectionist policies and encourages them instead to implement structural policy packages that create more job opportunities, increase business dynamism and promote successful reallocation, ensuring that the gains from trade are better shared by all.

Continue reading #OECD Make better use of fiscal initiatives to escape low-growth trap

On the Agenda: Sir Julian King, State of the Union, Apple, Car Emissions

Coming up next week at the Strasbourg Plenary: lots of special guests, a grilling for Commissioners and a little something called the State of the Union. Welcome to the Agenda. The last year has had its fair share of problems: terrorism, a refugee crisis and now a looming Brexit. For many an observer, the EU is in a pressured situation. Can the Commission President convince that he is the right man to steady the ship?


In his speech last year, the EU’s first elected Commission President talked about having greater unity and honesty. But instead of citizens getting closer to the EU, British people voted to leave it. Mr Juncker needs to show a faltering EU is not failing. No doubt he will bring his honesty to his latest speech but can he deliver real solutions? Well one of the things that Mr Juncker has done in reaction to growing terrorism threat is to create a new Commissioner portfolio, an anti-terror tsar.

And showing his sense of humour despite a Brexit, the man tasked for the job is British. Back in March, Mr Juncker called for a Security Union following the attacks in Brussels. With the resignation of Johnathan Hill as Commissioner for Financial Services as every Member State must be represented at a commission level, the incumbent UK Ambassador to France, Sir Julian King, has been put forward as Commissioner designate for Security Union. Will MEPs choose to anoint the UK’s latest offering? The hearing takes place on Monday with a vote on his candidacy on Thursday.

The EP’s Car Emissions Inquiry Committee set up in the wake of the VW diesel dupe will vote on an interim report on Tuesday but not before they request Commissioners to give evidence at a meeting of the EMIS Committee on Monday. Find out what the Internal Market Commissioner Elżbieta Bieńkowska and Karmenu Vella the Commissioner for Environment have to say. And now for some news in brief. The Commission took a bite out of Apple, smacking it with a 13 billion euro fine for unpaid taxes to Ireland.

New heights for the Commission, sticking to its promise to fight corporate tax avoidance. Commission representatives will be in Strasbourg to update MEPs on Apple.

MEPS will discuss recent infractions of fundamental rights on Tuesday and vote on a non-binding resolution on Wednesday. This session brings His Holiness the 14th Dalai Lama to Strasbourg. Find out what he has to say to MEPs of the Foreign Affairs Committee on Thursday. The author of a parliamentary report says the EU has neglected social rights of EU workers and calls for legislation to be strengthened. MEPs debate the report and vote on it on Thursday.

This year’s G20 Summit has been quite eventful. There’s been a diplomatic spat between the US and China and after being the subject of verbal abuse, US President Obama cancelled a meeting with the President of the Philippines. Despite the shenanigans, China and the US ratified the Paris climate agreement but no deal was reached between Russia and the US on Syria, and no promises made to the UK on a potential UK-US trade deal. MEPs will digest the two-day session of heads of state on Tuesday.


Euroxx: Credit Contraction of Greek Banks at 1.9% y-o-y in April ‘16

According to the latest data released by Bank of Greece, total credit dropped by 0.2% m-o-m and 1.9% y-o-y (March: -2.1% y-o-y) to €202.1bn in April ‘16. Net flow remained negative, although on a decelerating pace, on net deductions of €117m from net outflows of €146m in March ’16.

In particular,

Ø  Corporate lending remained flattish (-0.1%) m-o-m and down by 1% y-o-y to €95.7bn, accounting for 47.4% of total credit. Net flows remained positive in April at €118m from €224m a month ago.

Ø  Loans to sole proprietors eased by 0.4% m-o-m and decreased by1.3% y-o-y to €13.3bn, accounting for 6.6% of total credit. Net flows remained negative at €46m from net deductions of €9m a month ago.

Ø  Individuals & private non-profit institutions’ lending remained flattish m-o-m (-0.2%) and dropped by 2.9% y-o-y (March ‘16: -3% y-o-y) to €93.1bn, accounting for 46.1% of total credit. Monthly net deductions settled at €189m in April ’16 from €361m in March.

Ø  Outstanding balances in housing loans remained flattish m-o-m (-0.3%) and dropped by 3.3% y-o-y to €66.4bn. Housing loans account for 71.3% of household lending and 32.8% of total credit. Deductions reached€178m in April ’16 from €214m in March.

Ø  Consumer credit remained almost unchanged m-o-m (-0.1%), while dropped by 1.6% y-o-y (March ‘16: -1.7% y-o-y) to €25.3bn. Consumer credit accounts for 27.2% of household lending and 12.5% of total credit. Net flows remained negative in April ‘16, on deductions of €14m vs deductions of €47m in March ‘16.


Source: Euroxx Research,

The importance of global internet inclusion

Global inclusion in the Internet could bring seven percent of the world’s population – 500 million people – above absolute poverty levels, and add US$6.7 trillion to global economic output, according to a new study by Strategy&, PwC’s strategy consulting business.

The study, for Facebook, encompassed 120 countries over a 10-year period and describes how the Internet could change as more people from developing markets get online. It examines how barriers to accessing the internet could be removed, and how the internet could change as more people from developing markets get online.

Despite the ongoing digital revolution, the number of new Internet subscribers, most of whom are in developing nations, has slowed in recent years, only growing in single digits since 2013. This leaves 4.3 billion people disconnected from a modern economy that would benefit by over US$6 trillion with their participation.

According to the report “Connecting the World”, bringing the whole world online would create huge benefits for developing countries and for businesses over the coming five years, including:

  • Social and economic improvement for over 4 billion people
  • An additional global economic output of US$6.7 trillion
  • A $400 billion growth opportunity for telecom operators
  • A $200 billion opportunity for content providers

Progress has been slow due to barriers including the cost of coverage, existing infrastructure speed and capacity, and the need to implement new infrastructure where it does not exist. The study finds that with retail Internet prices needing to fall nearly 70 percent to make the Internet affordable to 80 percent of the population, action is required across key areas of connectivity, content and the retail service to bring more people online:

  • Replacing current 2G networks with 3G or 4GLTE could bring a 60-70% reduction in the cost per MB to serve developing markets, making it profitable for operators to provide internet services, and opening up the internet to over 2bn people.
  • Providing content through a series of local high speed networks, would make it affordable for a further 300m people.
  • Offline distribution of content, including through national and regional data exchanges would improve access and affordability for a further 170m people
  • Governments offering content focused on education, social services or business opportunities could create an incentive for a further 200m to go online
  • Brand or subscriber subsidized access, for example learning centers, could bring another 500 million online globally

Economic Sentiment in Cyprus declined in May

In May 2016, economic sentiment in Cyprus deteriorated as the Economic Sentiment Indicator (ESI-CypERC) declined by 2.4 points compared to April 2016 as a result of the worsening of business confidence in services and construction, and the weakening of consumer confidence. Research conducted by “The Economics Research Centre” (CypERC) of the University of Cyprus.


  1. In May 2016, economic sentiment in Cyprus deteriorated as the Economic Sentiment Indicator (ESI – CypERC) declined by 2.4 points compared to April 2016 as a result of the worsening of business confidence in services and construction, and the weakening of consumer confidence. 
  2. The Services Confidence Indicator fell due to firms’ less positive assessments of past business situation and demand as well as to more pessimistic views regarding firms’ turnover over the next three months. 
  3. The Construction Confidence Indicator declined because of more negative assessments of order books and employment plans. 
  4. The Consumer Confidence Indicator deteriorated as a result of (i) consumers’ more pessimistic views regarding the future financial situation of their household and the general economic situation in Cyprus, and (ii) a decline in the likelihood of saving over the next 12 months. 
  5. The Retail Trade and Industry Confidence Indicators remained unchanged as the improvement in the assessments of recent trends was offset by a deterioration of firms’ expectations.

CypERC is an independent, non-profit organisation with the aim of promoting scientific knowledge in economics, especially in matters concerning Cyprus.

Greece’s Proposals to End the Crisis: My intervention at today’s Eurogroup

Νέα ανάρτηση Γιάνη Βαρουφάκη στο προσωπικό του blog για τη συζήτηση στο Eurogroup

Yanis Varoufakis

The only antidote to propaganda and malicious ‘leaks’ is transparency. After so much disinformation on my presentation at the Eurogroup of the Greek government’s position, the only response is to post the precise words uttered within. Read them and judge for yourselves whether the Greek government’s proposals constitute a basis for agreement.

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