EU, IMF seek to repair Greek rift after asset sale furore | business | Hindustan Times
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EU, IMF seek to repair Greek rift after asset sale furore

business Updated: Feb 13, 2011 21:07 IST

AFP
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The EU and IMF on Sunday hastened to prevent a rift with Greece after the debt-hit country slammed one of their auditors over controversial calls for a huge state asset sale to keep Athens' tortuous recovery on track.

The two organisations and the European Central Bank, which are supervising a tough austerity mandate for Greece, issued a statement expressing "the deepest respect" for the "tremendous" fiscal overhaul undertaken in Athens.

The three, known as the 'troika' in Greece, added that the ongoing austerity measures were based on "mutual trust".

"Our three institutions have full respect for the prerogatives and initiatives of the Government in all areas of economic decision-making, and our role is to advise and support the government while considering options during the decision-making process," their statement said.

"It is regrettable if a different impression was perceived at any time."

The furore began on Friday after troika auditors said the Greek state should sell assets worth 50 billion euros ($68 billion) to reduce its rampant debt, a figure far beyond anything the government had indicated among its plans so far.

Athens, which last year accepted the supervised reforms in return for a massive rescue loan, at first seemed to take the demand in stride.

An unofficial document released by the finance ministry immediately after the conclusion of a joint EU-IMF-ECB news conference Friday said a "portfolio" of assets worth "at least 50 billion euros" would be created for exploitation.

But in a dramatic turnaround some 10 hours later government spokesman George Petalotis said the sale call amounted to interference in Greek affairs.

Greek Prime Minister George Papandreou on Saturday added that he had protested to the International Monetary Fund and the European Union over the "unacceptable behaviour" of the troika representatives.

On Sunday, his finance minister George Papaconstantinou specifically blasted the European Commission representative after he repeated calls for the enormous asset sale in statements to two Greek newspapers.

"Alleged comments by the representative of the European Union to Sunday papers are at least off the mark, and certainly inaccurate," Papaconstantinou said in a statement.

"We are exploiting state real estate, not selling state land. And the decisions regarding what and how are taken in co-ordinated fashion by the Greek government, nobody else," the minister said.

In one interview to To Vima daily, Deroose had encouraged the Greek state to "sell beaches to develop tourism and the tourism housing market."

The Proto Thema daily also quoted Deroose as saying that Greece could make five billion euros by selling off the former Athens airport, which lies on a lucrative expanse on the capital's southern coast.

And he said another 35 billion euro could be raised from the sale of other state lands, regional airports and ports.

IMF mission chief Poul Thomsen also said Greece should "sell land, including the (former) airport," in statements to Kathimerini daily.

"We are now at a critical junction where we need to see the acceleration of reforms," Thomsen said.

Greece had so far already earmarked several state properties for sale but only planned auctions worth seven billion euros over the next three years.

It was the first time since Greece's debt rescue in May that the two sides seemed to be at odds over what the next steps of Greek economic recovery should entail.

Greece's public debt stands at around 300 billion euros after years of large public deficits that in 2009 stood at 15.4 percent of output, more than five times the allowed EU level.

A planned extension of austerity reforms to 2015, two years after the government's current mandate, has prompted speculation that the government could call early elections.