Saturday

24th Jun 2017

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.

EU extends sanctions on Russia

German chancellor Angela Merkel said that Russia hadn't done enough to implement the so-called Minsk peace process, a condition for lifting the sanctions.

Focus

UK's universities set 'Brexit wish list'

British academics want to guarantee residency and work rights for their EU staff, as well as "enhanced mobility opportunities" for UK and EU students, mostly by keeping British participation in EU funding programs.

News in Brief

  1. Merkel and Macron hold symbolic joint press conference
  2. Juncker has 'no' clear idea of kind of Brexit UK wants
  3. Belgian PM calls May's proposal on EU citizens 'vague'
  4. UK lacks support of EU countries in UN vote
  5. Spain to command anti-smuggler Mediterranean force
  6. Estonia confirms opposition to Nord Stream 2 pipeline
  7. Ireland and Denmark outside EU military plan
  8. EU leaders renew vows to uphold Paris climate deal

Stakeholders' Highlights

  1. EPSUOn Public Services Day, Stop Austerity! Workers Need a Pay Rise!
  2. EGBAOnline Gambling: The EU Court Rejects Closed Licensing Regimes In Member States
  3. World VisionFaces of Today, Leaders of Tomorrow: Join the Debate on Violence Against Girls - 29 June
  4. ECR GroupThe EU Must Better Protect Industry from Unfair Competition
  5. Malta EU 2017Better Protection for Workers From Cancer-Causing Substances
  6. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  7. Dialogue PlatformGlobalised Religions and the Dialogue Imperative. Join the Debate!
  8. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million
  9. EUSEW17Bringing Buildings Into the Circular Economy. Discuss at EU Sustainable Energy Week
  10. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  11. Malta EU 2017End of Roaming Charges: What Does It Entail?
  12. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move

Latest News

  1. Macron’s investment screening idea watered down by leaders
  2. Leaders unimpressed by May’s offer to EU citizens
  3. New Irish PM praises unscripted nature of EU summits
  4. EU extends sanctions on Russia
  5. UK's universities set 'Brexit wish list'
  6. Decision on post-Brexit home for EU agencies postponed
  7. May's offer on citizens’ rights dismissed as ‘pathetic’
  8. 'Historic' defence plan gets launch date at EU summit