Sunday

4th Dec 2016

Greece faces 'massive' loss of sovereignty

  • A tear gas canister lying on the street in Athens (Photo: Tilemahos Efthimiadis)

Eurozone finance ministers over the weekend staved off looming bankruptcy in Greece by agreeing to release the next tranche of aid to the country, but Athens will pay with a massive loss of its sovereignty, the eurozone chief has said.

In return for the €12 billion - the fifth payment from the €110 billion EU-IMF loan agreed last year - Greece will have to push through a swathe of privatisations reminiscent of the selling of East German firms in the 1990s after the fall of Communism.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"The sovereignty of Greece will be massively limited," Jean-Claude Juncker told Germany's Focus Magazin in an interview published on Sunday (3 July), just hours after the eurozone ministers reached agreement.

"For the upcoming wave of privatisation they need a solution modelled on the German Treuhandel," he said referring to an agency used by Germany to sell off some 14,000 former East German firms, at a huge job and profit loss.

Greece has agreed to raise €50 billion by 2015 through a massive sell-off of state assets. This and austerity measures imposed by the government have been hugely unpopular, bringing Greeks to the streets in their thousands to protest.

In order to make sure Athens follows through on its commitments, the plan will be "supplemented by large-scale technical assistance" from the European Commission and member states, finance ministers said Saturday.

Acknowledging the difficulty for Greece, the Luxembourg prime minister said that Greeks should not be "insulted" so much as supported and looked after. Still, he pointed out that the country had brought its fate upon itself.

"[The crisis was] largely self-made​​. Between 1999 and 2010, wages rose by 106.6 percent, even though the economy did not grow in equal measure. The wage policy went completely out of control, while productivity was not taken into consideration," said Juncker.

Over the weekend the EU ministers agreed to pay €8.7 billion to Greece. The remaining €3 billion is expected to be signed off by the IMF by the end of this week.

The agreement means that Greece will be able to meet its repayments due mid this month.

However, the ministers did not agree the terms of a whole new bailout noting that the "precise modalities and scale of private sector involvement" had yet to be determined. Agreement is now expected in September although the issue will be discussed again when ministers meet on 11 July.

One of the sticking points is a Finnish demand that it can lend to Greece only if Athens provides collateral. There is also uncertainty over a German-led push to enlist private creditor participation.

Interview

Polish government in bid to defund NGOs

Ruling Law and Justice has promised to overhaul the NGO sector. The move could strain relations with Norway, a major donor to Polish civic life.

Column / Brexit Briefing

Davis brings Brexit back to reality

Brexiteers will be shocked to hear the government is considering slaughtering the sacred cow, offering up contributions to the EU budget in exchange for market access.

News in Brief

  1. Talks on wholesale roaming rules to start
  2. Lead MEP Dieselgate committee: Italy and Slovakia will cooperate
  3. Transparency NGO sues EU commission on Turkey deal
  4. Pro-EU liberal wins UK by-election
  5. Finnish support for Nato drops, Russia-scepticism grows
  6. Cyprus talks to resume in January
  7. Documents from German NSA inquiry released
  8. Transport commissioner 'not aware' of legal action on emissions

Stakeholders' Highlights

  1. CESIElects Leaders and Sets Safety & Health at Work and Gender Equality Among the Guidelines For Next Term
  2. European Gaming & Betting AssociationContinues to Grow its Membership and Welcomes its Newest Member Association
  3. ACCASupports the Women of Europe Awards, Celebrating the Women who are Building Europe
  4. European Heart NetworkWhat About our Kids? Protect Children From Unhealthy Food and Drink Marketing
  5. ECR GroupRestoring Trust and Confidence in the European Parliament
  6. UNICEFChild Rights Agencies Call on EU to put Refugee and Migrant Children First
  7. MIRAIA New Vision on Clean Tech: Balancing Energy Efficiency, Climate Change and Costs
  8. World VisionChildren Cannot Wait! 7 Priority Actions to Protect all Refugee and Migrant Children
  9. ANCI LazioRegio-Mob Project Delivers Analysis of Trasport and Mobility in Rome
  10. SDG Watch EuropeCivil Society Disappointed by the Commission's Plans for Sustainable Development Goals
  11. PLATO15 Fully-Funded PhD Positions Open – The Post-Crisis Legitimacy of the EU (PLATO)
  12. Access NowTell the EU Council: Protect our Rights to Privacy and Security