Greek PM heads to US with full agenda

ATHENS – Greece’s recently elected Prime Minister Kyriakos Mitsotakis is on a mission to drive investments to the austerity-eroded Mediterranean country and is determined to propel the economy to prosperity. 

Indeed, in the past few weeks a number of business operatives and representatives of funds or investment banks have been seen regularly entering the Maximos Mansion, the seat of the Greek government in Athens. 

 These individuals usually enter from an entrance on the small side street Vasileos Georgiou, but don’t necessarily have the opportunity to meet with the Prime Minister. Instead, certain key individuals close to Mitsotakis – they can be either ministers or advisers – are tasked with meeting market representatives and discussing prospective investments.

 With Mitsotakis having taken office following elections in early July, the new Greek government has already signaled its readiness to reduce taxes, tackle bureaucracy, and remove procedural obstacles so that crisis-hit Greece can start recovering in a sustainable way. 

 In public statements and also in discussions with advisers and visitors to his office, Mitsotakis is clear – there is no way that Greece can return to the path of growth, without a boom in both foreign and domestic investments. This is why some of the first decisions of the government have included the reduction of the property tax, the reduction of the income tax for business from 28% to 24% starting from the fiscal year 2019, and the simplification of licensing processes. 

 Mitsotakis’ strategy is not difficult to understand. From the early stages of his tenure, he has been trying to change the narrative for Greece on the international stage. After a short summer break, he travelled consecutively to Paris, Berlin and The Hague, meeting with Emmanuel MacronAngela Merkel, and Mark Rutte.

The message to these capitals was that Greece is going to carry out the necessary reforms, not because someone is instructing the government to do so, but because it is essential that they get done.

Mitsotakis is now taking the show on the road when he travels to the US on 22 September. The Prime Minister is no stranger to the American way of life after having earned his Bachelor’s degree at Harvard and also attended Stanford University for his Master’s degree. This is the first time, however, that Mitsotakis will be crossing the Atlantic as Prime Minister. 

Mitsotakis’ non-stop agenda

Mitsotakis’ calendar is already filled with bilateral meetings. On Tuesday, he is scheduled to meet US President, Donald J. Trump, while Secretary of State, Mike Pompeo, is expected in Athens in early October with the primary objective of renewing the already existing Military Defense Cooperation Agreement that dates back to 1990. 

 The country is experiencing turbulent times with Turkey and instability in the management of the refugee crisis following an increase of the migratory flows towards the Greek islands during the summer months. Turkey seems to be managing the situation strategically in a standoff with the European Union. Amid this backdrop, Mitsotakis is set to hold his first meeting with Turkish Prime Minister Recep Tayyip Erdogan while in the US. He is also expected to meet with the Prime Minister of North Macedonia, Zoran Zaev, and with Albania’s Prime Minister, Edi Rama, as well as with UN Secretary General, Antonio Gutteres

 These meetings are important when taking into consideration the geopolitical challenges that Greece is faced with. There are, however, other meetings that Mitsotakis will hold while in New York that are also of extreme importance.

According to sources close to the Prime Minister, he is scheduled to meet with high-ranking Goldman Sachs executives and with the Chairman and CEO of JP Morgan, Jamie Dimon.

He is also expected to have lunch with US Secretary of Commerce Wilbur Ross and some powerful business operatives. 

 Ross visited Athens some weeks ago and praised the new Greek government, stating at the time that if they reduce taxes, meet the primary surplus targets, and reduce red tape, then foreign investors will be attracted. 

 Mitsotakis is also expected to have other one-on-ones with representatives of funds and investment banks, highlighting his priorities and inviting potential investors to invest in the prospect of the country. 

 Before Mitsotakis would ever set foot in the United States, Alex Patelis, one of his close advisers, travelled to New York to pave the way for the Greek Prime Minister’s contacts. Patelis is an ex-Merill Lynch executive and now Mitsotakis’ new chief economic adviser. He is known in investors’ circles in the US and was also recently featured on Bloomberg’s TV-Show ‘Bloomberg Surveillance’, where he described the key priorities of the new government and reiterated that it is committed to reforms. 

 

Making the investment grade

At the same time, and despite the fact that it went widely unnoticed, the Greek government has hired US investment bank Lazard to be the new financial advisor to the Greek Public Debt Management Authority, in the place of Rothschild, with the task of supporting the Authority in the management of the country’s public debt. The key to this deal, however, lies in the success fee that is included, to return Greek bonds to investment grade within the next two years.

Before the July elections, Mitsotakis repeatedly said in many interviews that his aim was to return Greek bonds to an investment grade within 18 months. Mitsotakis seems convinced that when taking into consideration the record low yields for Greek 10-year bonds that has been witnessed in the markets over the past weeks, and the readiness of his government to put forward a reform agenda – with true ownership of it – the country’s access to the markets will soon be fully restored.