German chancellor Angela Merkel is visiting Greece today, and it’s shaping up to be a doozy.
The office of the Greek prime minister announced the schedule that Merkel’s visit will follow on its website (in Greek).
At 1:30 PM in Greece (7:30 AM ET), Greek prime minister Antonis Samaras will meet Merkel at the Eleftherios Venizelos airport. From there, the two leaders will travel to the Maximos Mansion, the residence of the Greek prime minister, where they will meet at at 2:15 PM (8:15 AM ET).
After the meeting, Merkel and Samaras will hold a press conference to debrief the public.
Here are the two main things everyone is worried about.
The first major concern is that the city will be up in flames today.
Greece’s two largest labor unions, ADEDY and GSEE, are calling for a massive work stoppage in the afternoon so that workers can protest Merkel’s visit. The protests are expected to begin at 12:00 PM local time (6:00 AM ET) and last until 3:00 PM (9:00 AM ET).
There is a ban on rallies in Athens today between 9 AM and 10 PM local time. Here is a map showing where the crackdown is in effect, via Athina Stavridou:
LivinginGreece.gr has details on the schedule of protests today:
- Athens—Public sector union ADEDY and private sector union GSEE to hold protest at 13:00 in Syntagma Square. – ADEDY Press Release (in Greek)
- PAME union to start from Omonia at 13:00 and merge with union protest in Syntagma. – PAME Press Release (in Greek)
- POE-OTA municipal workers to gather at 12:30 outside headquarters near Karaiskaki Square, then join union protest. – Naftemporiki (in Greek)
- Around Greece—POPEK union (gas station owners/workers) to hold spontaneous protests at tax offices, mayor’s offices, etc. Original protest outside Ministry of Finance postponed to Wednesday due to security and street closures in Athens. – Naftemporiki (in Greek)
So, there is concern that things could get a little hectic in Athens today.
The second big worry is that Merkel’s visit ultimately means very little, since Berlin has already said that Greece can’t be given additional aid before the troika report on the country’s reform progress comes in November.
In other words, the visit may just be an excuse for Merkel to say that at least she went and took a look at the situation on the ground in Greece.
Citi economist Jürgen Michels wrote in a recent note to clients that while Merkel’s visit express solidarity, she can’t really offer Greece much room on previous agreements over terms of the bailout funds:
The first visit of the German Chancellor to Greece since the start of the sovereign debt crisis is an important symbol of solidarity. However, with increasing domestic pressure on the German Chancellor not to become too generous to Greece, we do not expect Ms Merkel to come up with additional forms of support for Greece.
And Societe Generale’s Michala Marcussen provides a little information on the economic negotiations that serve as a backdrop to today’s visit:
Talks on Greece still on-going: Talks with the Troika on EUR13.5bn of austerity measures are due to continue in the coming week and week-end press reports suggest that Prime Minister Samaras will request a two-year extension when Chancellor Merkel visits on 9 October. The Troika report is due early November and before then there will be no decision on Greece. The German paper Welt am Sontag reports that Greece will face public debt of over 140% of GDP in 2020. This in itself is not news, but should this become the official forecast, a real can of worms would open.
The IMF has made it clear that it will not pay-out the next bail-out tranche unless Greek public finances are deemed sustainable. And while IMF Director Lagarde has suggested OSI, ECB board member Asmussen has in an interesting twist highlighted that the ECB cannot (as a question of law) accept debt forgiveness, maturity extension or lower interest rates as all would be direct support for the Greek state. Germany, moreover, remains opposed to any form of OSI. Our base case remains that a compromise will be found to give Greece more time, but no more money for now. Recent rhetoric from the IMF is raising red flags, however, and the risk of renewed turmoil from Greece is increasing.