Greece lashes out at EU/IMF but will stick to reform
Greece's harsh criticism of the EU and the IMF over its comments on the need for privatisation is unlikely to affect Athens' austerity plans as it was mostly aimed at placating a sensitive domestic audience.
February 15, 2011 / 10:02 IST
Greece's harsh criticism of the EU and the IMF over its comments on the need for privatisation is unlikely to affect Athens' austerity plans as it was mostly aimed at placating a sensitive domestic audience.
Government officials said on Saturday that the EU and IMF had interfered unacceptably in domestic affairs by announcing a high privatisation target for Greece and criticising strikes after its review of progress on the country's 110 billion euro bailout deal. Selling public assets is a sensitive issue in Greece, especially for the ruling Socialists. No privatisations have been completed in the party's 16 months in office.But Athens' harsh comments appear to have been mostly a response to a media outcry and to some ruling socialists being caught out by EU, IMF and ECB officials -- dubbed the 'troika' -- telling a news conference on Friday that Greece should target 50 billion euros in privatisations over the 2011-15 period. "I don't think this showed any difference on substance between the troika and the government," said Yannis Stournaras, head of the Athens-based Foundation of Economic Research."It was a communication error," Stournaras said."Perhaps the government did not expect the troika to come out and specify things in detail before parliament, or at least the ministerial council, have been informed."Indeed, the government admitted in a note circulated shortly after the IMF/EU news conference that it had agreed to the higher target, which became the focus of the week-end uproar.Analysts also noted that the apparent war of words only came about when a government spokesman issued a statement lashing out at the lenders after midnight on Friday, effectively turning the media fuss into the first public row over the bailout.Theodore Couloumbis, vice-chair of Greek think-tank ELIAMEP, agreed that the spat was a matter of poor communication but added that the lenders needed to watch their words."This shows the troika officials have not been sensitised to the deep wounds in the Greek psyche about foreign interference in internal affairs," he said."Had they been sensitised they would have been very careful to avoid a public set of recommendations that appear to be supplanting government decision-making."The international lenders, sensitive to how they are perceived in Greek public opinion, issued statements saying that they regretted any misunderstanding over the bailout and that they respected Greek sovereignty.
Hard sell
Greece's international lenders say privatisations are key to cut the country's debt and have been pushing for an ambitious target for months. But the weekend row shows that the government will face a hard road in raising funds from privatisations.That point was underlined on Sunday when Infrastructure Minister Dimitris Reppas said that the 50 billion euro target was impossible to achieve -- openly contradicting the finance ministry's note.Still, one EU diplomat who requested anonymity put the weekend spat down to Greek politics."This is more about dealing with internal problems in the socialist party and with the political opposition," the diplomat said. "It should not have an effect on Greece meeting its obligations as agreed in the memorandum."Opposition parties also accused the government of theatrics, saying it was well aware of what Greece's international lenders wanted."The troika show, starring Finance Minister George Papaconstantinou and directed by Prime Minister George Papandreou, was a flop," the Left Coalition party said. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
