Wednesday

28th Jul 2021

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.

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

"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.

EU hits vaccination target, as Delta variant now dominates

The European Union has vaccinated 70 percent of its adult population with one shot. "The EU has kept its word and delivered," said EU Commission president, Ursula von der Leyen. However, only 57 percent of adult Europeans are fully-vaccinated.

Opinion

Brexit: what is the 'Lugano Convention' and does it matter?

After Brexit, the UK ceased to be a member of the Lugano Convention, an international treaty which governs cross-border civil and commercial legal disputes. In May, the European Commission published an opinion calling for the UK's re-application to be rejected.

Column

Does democracy need troublemakers?

Comedians, businessmen and other outsiders – think of Edward Snowden, Slawi Trifonow (the TV star who won the Bulgarian elections recently), or Donald Trump – try to disrupt power, pretending to expose political elites. Why is this happening?

Opinion

Separating migrant families at EU borders must stop

Hundreds of documented cases of pushbacks of migrants and asylum seekers tell the story of a European Union whose member states seem to resort to increasingly degrading and inhuman practices in the management of its external borders.

Feature

'Prison island' birthplace of EU reborn as think-tank venue

Santo Stefano is being revived through a €70m refurbishment project to turn it into a high-level European think-tank, academy and open-air museum aimed at boosting the European integration project by training 'enlightened' EU youth, scholars and politicians.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. EU hits vaccination target, as Delta variant now dominates
  2. European arms 'displaced over a million people', research finds
  3. Brexit: what is the 'Lugano Convention' and does it matter?
  4. US maintains summer travel ban on EU tourists
  5. Does democracy need troublemakers?
  6. Separating migrant families at EU borders must stop
  7. Germany mulls restrictions for unvaccinated as cases soar
  8. 'Prison island' birthplace of EU reborn as think-tank venue

Join EUobserver

Support quality EU news

Join us