EU, IMF voice support for Greek government

ATHENS, Greece (AP) — The international organizations supervising Greece’s efforts to overhaul its debt-ridden economy have voiced support for the Greek government and its people, after Athens slammed the organizations for what it called interference in its domestic affairs.

The International Monetary Fund, European Central Bank and European Commission statement, issued just before midnight Saturday, appeared designed to dampen Greek tempers that frayed following a visit by the three to review the progress toward economic reform.

The three said they “recognize the difficult challenges facing the Greek economy and we have the deepest respect for the tremendous efforts being made by the Greek people.”

The Greek government a day earlier reacted harshly to a news conference in which the three institutions — known collectively by Greeks as the troika — said Greece must privatize 50 billion ($68 billion) in state assets and speed up structural reforms in the next few months to keep the country’s troubled finances afloat.

In an interview published in Sunday newspaper “Proto Thema” the troika’s European Commission representative, Servaas Deroose, Deputy Director-General for Economic and Financial Affairs at the Commission, made specific references to the privatization that provoked the ire of Greek Finance Minister Giorgos Papaconstantinou.

“Over the next two years you will proceed with privatizations worth 15 billion...5 billion will come from selling the (former Athens airport) and the other 10 billion from (state-controlled companies). The government will tell us which companies will be privatized,” Deroose was quoted as saying.

Deroose went on to say, according to the paper, that, in 2013-15, the government will sell off airports, ports and other state property “from which it must get 35 billion. There is also non-inventoried state property we haven’t included in our estimates,” he reportedly said.

“The alleged statements by the representative of the European Commission to Sunday newspapers are, to say the least, careless, and certainly inaccurate...We develop state property, we do not sell public land. And the decisions are taken...by the Greek government and no one else,” the finance minister said in a statement.

The IMF and European Union countries that use the euro rescued Greece from bankruptcy with a 110 billion bailout loan package last May that kept it from defaulting on its mountainous debts, but at a price that many Greeks consider too harsh.

The three institutions, which are supervising the bailout deal, “have full respect for the prerogatives and initiatives of the government in all areas of economic decision-making,” they said. “It is regrettable if a different impression was perceived at any time.”

The reforms, which include cutting public sector salaries and pensions, increasing taxes and opening up highly regulated professions to broader competition, have been highly unpopular, with labor unions organizing frequent demonstrations and strikes.

The first public indication of the potentially damaging spat between Greece and the troika appeared in an unusually harshly worded pre-dawn statement by government spokesman Giorgos Petalotis, in which he described the behavior of the troika representatives at a Friday news conference as “unacceptable.”

“We have needs, but we also have limits. And we do not negotiate the limits of our dignity with anyone,” Petalotis said in the statement, issued just before 2 a.m. “We take orders only from the Greek people.”

IMF chief Dominique Strauss-Kahn phoned Prime Minister George Papandreou, who also told the IMF head that the delegates’ behavior had been unacceptable, Papandreou’s office said.

On Friday, the debt inspectors said Greece must privatize 50 billion ($68 billion) in state assets — seven times larger than a target set only three months ago — and speed up structural reforms. IMF mission chief Poul Thomsen dismissed a suggestion in a reporter’s question that Greece might sell its ancient monuments to raise money, but argued that “the mismanagement of public property is a major source of waste” in Greece.

He also said Greece’s long-term reforms were being “fiercely tested by vested interests” and that some of the frequent demonstrations against the Greek government’s reforms were being carried out by groups angry at losing their “unfair advantages and privileges,” like truck drivers and pharmacists who work in closed industries the government is trying to open up.

“We asked them to help and we are fully honoring our commitments. But we didn’t ask for anyone to intervene in our country’s internal affairs,” Petalotis said in his pre-dawn statement, adding the government would make clear that “everyone must understand their role.”


Associated Press writer Demetris Nellas contributed to this report.

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