2nd Feb 2023

Greek criticism directed at EU institutions, says minister

Greek finance minister George Papaconstantinou went on the defensive on Monday (15 February), seeking to quell controversies surrounding recent comments made by the country's prime minister, George Papandreou, and reports of dubious dealings between Athens and Wall Street investment banks.

At an informal EU summit last Thursday, euro area leaders agreed to take "determined and co-ordinated action if needed to safeguard financial stability in the euro area as a whole." But in but a televised address a day later, Mr Papandreou appeared to criticise his EU partners, accusing them of creating a "psychology of looming collapse".

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Greece is accusing the EU institutions of sending mixed signals (Photo: John D. Carnessiotis, Athens, Greece)

Speaking to journalists in Brussels on Monday ahead of a meeting of eurozone finance ministers, Mr Papaconstantinou said the criticisms had been directed at EU institutions and not national capitals.

"He [George Papandreou] said in the last few months that we've often had mixed signals from a number of European institutions. He did not say ... that there were mixed signals from the European Council [of EU leaders]," insisted the finance minister.

EU institutions and national capitals have engaged in a tricky balancing act regarding Greece, say analysts. On the one hand they have sought to convince jittery investors that Athens will not be allowed to default on its debt obligations, while at the same time avoiding the signal that overspending governments will simply be bailed out.

Wall Street

The Greek administration also found itself embroiled in a second controversy on Monday, after news of dealings with Wall Street banks broke over the weekend.

Investment firms including Goldman Sachs arranged currency swaps for Greece over the last decade that allowed Athens to raise funds to reduce its budget deficit while pushing payments well into the future. Those transactions were not classified as loans, reports the the New York Times, and not made known to Brussels officials.

European Commission economy spokesman Amadeu Altafaj Tardio told a news conference in Brussels that the EU's statistics office, Eurostat, has already sought answers to the allegations, but Mr Papaconstantinou defended his country's actions.

"These kinds of more exotic financial instruments were, at the time, completely Eurostat legal," he said. "Greece was not the only country using them. They have since been made illegal and Greece has not used them since," he added.

Mr Papaconstantinou, a deputy in the European Parliament until elections last October brought Greece's center-left Pasok party to power, also implied the timing of the news story was more to do with different investment banks attempting to sully each others reputations, rather than the legitimacy of Greek dealings.

Confidence deficit

But the story is unlikely to help the Greek position, with Athens already suffering from a crisis of confidence.

At 12.7 percent of GDP in 2009, Greece's budget deficit is high but comparable to a number of other EU member states such as Ireland and the UK. Debt levels currently exceeding 110 percent of GDP and a past track record of failing to reach targets have caused Greece to become the focal point for market concerns however.

Doubts over the reliability of the country's statistical data have also contributed to the recent investor flight from the country's bonds and demands for higher yields.

On Monday, the college of 27 European commissions adopted a formal proposal to give Eurostat auditing powers, part of a bid to end doubts over the Greek data. If approved by national governments, the amended regulation on data collection will allow for more frequent and comprehensive statistical visits by Eurostat to member states.

In 2005, the EU executive body made a similar request for Eurostat auditing capabilities but was rebuffed by member states, who were reluctant to hand over power to the Luxembourg-based body. Observers suggest the current Greek crisis has softened government positions however.

As well as investors, European citizens outside Greece have expressed their exasperation with Europe's black sheep. A new poll published in Germany on Sunday shows a majority of Germans want the debt-ridden state to be thrown out of the eurozone, if necessary, and more than two-thirds oppose handing Athens billions of euros in credit.

Mr Papaconstantinou said he could understand German frustration, but pointed out that the EU and eurozone had brought great benefits to both strong and weak members, including in the area of trade and tourism.

"I think we need a more objective and cold assessment of what is going on," he said, warning against a debate that "touches on elements that we dont want to see in Europe in terms of divides between the north and the south."

Polish backpedal on windfarms put EU funds at risk

Draft legislation in Poland aimed at relaxing some of Europe's strictest laws surrounding onshore wind-turbines has been derailed by a surprise last minute amendment, which could put Poland back on a collision course with the EU.


More money, more problems in EU answer to US green subsidies

Industrial energy-intense sectors, outside Germany and France, will not move to the US. They will go bust, as they cannot compete in a fragmented single market. So to save industry in two member states, we will kill the rest?

Latest News

  1. MEPs launch anonymous drop-box for shady lobbying secrets
  2. Hawkish ECB rate-rise 'puts energy transition at risk'
  3. MEPs push for greater powers for workers' councils
  4. How Pavel won big as new Czech president — and why it matters
  5. French official to take on Islamophobia in EU
  6. EU green industry plan could spark 'dangerous subsidy race'
  7. Wolves should be defended, EU ministers urge
  8. EU Commission wants drones for Bulgaria on Turkey border

Stakeholders' Highlights

  1. Party of the European LeftJOB ALERT - Seeking a Communications Manager (FT) for our Brussels office!
  2. European Parliamentary Forum for Sexual & Reproductive Rights (EPF)Launch of the EPF Contraception Policy Atlas Europe 2023. 8th February. Register now.
  3. Europan Patent OfficeHydrogen patents for a clean energy future: A global trend analysis of innovation along hydrogen value chains
  4. Forum EuropeConnecting the World from the Skies calls for global cooperation in NTN rollout
  5. EFBWWCouncil issues disappointing position ignoring the threats posed by asbestos
  6. Nordic Council of MinistersLarge Nordic youth delegation at COP15 biodiversity summit in Montreal

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  4. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  5. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos
  6. European Committee of the RegionsRe-Watch EURegions Week 2022

Join EUobserver

Support quality EU news

Join us