Wednesday

25th May 2022

Brussels: Outside agency for Greek sell-off would threaten sovereignty

  • Tardio: 'International authorities taking control of the privatisation process - I don't think you can do that in a sovereign country' (Photo: ec.europa.eu)

The European Commission has warned that an international body taking charge of Greece's €50 billion privatisation programme - an idea that is being pushed by the Netherlands and Luxembourg - would threaten the country's sovereignty.

The EU executive's economy spokesman, Amadeu Altafaj-Tardio told reporters on Monday (30 May) that while the commission would be happy to offer technical assistance to support Greece in the task, it should remain under the management of the Greek government.

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"The commission would like to recall that we in the past have offered international technical assistance to Greece, notably in the reshaping of the statistics office," he told reporters in Brussels. "But we have not received any request from the Greek authorities and there would have to be a request from them before any technical assistance could be offered."

He emphasised that the commission preferred to offer "technical assistance" rather than the Dutch proposal for international oversight "because international authorities taking control of the privatisation process - I don't think you can do that in a sovereign country."

He highlighted that Athens had already achieved success in reducing the government deficit by five percent this year and its transformation of the Greek statistical agency "into a completely new office that provides accurate statistics for the first time." He added: "We trust the Greeks to perform the privatisation themselves."

The comments were made in relation to a call issued on Thursday by Dutch finance minister Jan Kees de Jager in an interview with the FT Deutschland business daily.

De Jager said that the privatisation process should be taken out of Greek hands and placed under international supervision. The scheme would be modelled on the German Treuhandanstalt, or Trust Agency, the independent body that carried out the privatisation of the former East Germany's state property after the fall of the Berlin Wall.

The privatisation assets placed in such a Greek agency "should be used as collateral for the loans," De Jager said, referring to a potential €60-70 billion second bail-out of the country currently in discussion.

He conceded that such a move would face significant domestic opposition. "The Greek parliament will not like it but I think you such sensitivities no longer matter," he said. "The Greek government and parliament must be clear that a renewed rescue package creates political costs This is the same in the Netherlands and Germany."

An EU diplomat familiar with the proposal told EUobserver: "The idea is not a Dutch idea per se, but they are spearheading it ... It's not so much that the Greeks cannot be trusted. It's just that they are clearly having so much trouble pushing these sorts of things through."

The contact added: "In a way, it can be seen as giving them a helping hand. Independent outside experts will be much more able to push through the tough measures than domestic politicians."

The source noted that it is premature to be discussing which countries or institutional actors would be represented in the agency.

The Dutch have an ally in Jean-Claude Juncker, the chair of the eurogroup of states, who is also taking a hard line on the question of taking the privatisation process out of Greek hands.

"I would welcome it very much if our Greek friends found a privatization agency independent of the government and modeled after Germany's Treuhandanstalt," he said in an interview with newsweekly Der Spiegel last week. "Henceforth, the European Union will escort Greece's privatization program as if we were conducting it ourselves." Juncker added Greece should sell off more than the €50 billion originally planned.

The troika of the EU, the International Monetary Fund and the European Central Bank estimate Greece to have at its disposal a total of €500 billion in wealth between its financial assets, public enterprises and real estate holdings.

Germany however is thought to want to wait for the report back from troika inspectors on the state of Greek finances and its performance in implementing austerity, structural adjustment and privatisation measures.

The assessment is due by the end of the this week or the beginning of next week at the latest.

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