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Tuesday 23 January 2018

Discontent over Greece bailout vow

Greece's Prime Minister Alexis Tsipras is briefing his party's lawmakers over the bailout pledge made to eurozone leaders (AP)
Greece's Prime Minister Alexis Tsipras is briefing his party's lawmakers over the bailout pledge made to eurozone leaders (AP)

Greece's prime minister has been briefing his party's lawmakers on pledges made to European creditors to win a four-month extension of the country's bailout, amid simmering discontent with what some see as a capitulation.

Greece cleared a major hurdle yesterday after the finance ministers of the other eurozone countries approved a list of Greek policy goals, including pledges to fight corruption, and granted the four-month extension.

Prime minister Alexis Tsipras was elected last month on campaign pledges to repeal some of the budget cuts and tax hikes made in return for 240 billion euro (currently £176 billion) in rescue loans from other eurozone countries and the International Monetary Fund (IMF).

Without the extension, Greece faced the possibility of bankruptcy, limits on bank transactions and even a potential exit from euro, the joint currency used by 19 European nations.

While the government has sought to present the negotiated deal as a victory, it has faced criticism from party hardliners as well as opposition parties.

Energy and environment minister Panagiotis Lafazanis, a party hardliner, has insisted he will stick to election promises not to go ahead with privatisations.

Today's edition of the daily Ethnos newspaper quoted him as saying that the privatisation of the power grid nor that of the country's power utility would be halted, as final binding bids had not yet been submitted.

Finance minister Yanis Varoufakis, speaking on RealFM radio today, said the list he sent to Brussels included "constructive ambiguity" on the issue of privatisations.

The text of Mr Varoufakis' letter to Brussels says completed privatisations will not be rolled back and those where tenders have been launched "the government will respect the process, according to the law".

"The law gives the government possibilities to both change the terms of the procedure and at some point to check the legality of this procedure," Mr Varoufakis said. "Our position is very simple. The sell-off of family silver at rock-bottom prices and in a way that doesn't lead to development for the economy must stop."

The most direct, and symbolically damaging, criticism came over the weekend from Syriza's European parliament member Manolis Glezos, famed in Greece for removing the Nazi flag from atop the Acropolis during the German occupation in the Second World War.

Mr Glezos wrote an open letter over the weekend publicly apologising to the Greek people for backing what he said was the "illusion" that the hated bailout austerity measures would be immediately repealed.

Greece's list of policy goals is being used as a starting point for the creation of new reform measures the Greek parliament will have to vote into law and includes pledges to fight tax evasion and corruption.

It also says the government will not roll back privatisations as it had promised before being elected on January 25 and not take any unilateral action without consulting with Greece's creditors.

The IMF and the European Central Bank, both bailout contributors, have expressed reservations about the Greek pledges, saying they were enough to approve the extension but were vague and needed to be translated into concrete action.

Meanwhile, German chancellor Angela Merkel welcomed agreement on the four-month extension to Greece's financial bailout but said "a lot of work" remains ahead.

Ms Merkel said she was glad Greece's eurozone partners had "found a starting point for negotiations with the new government", adding: "I welcome the fact that we were able to assert the principle of 'quid pro quo' again, also with the Greek proposals that arrived yesterday."

Key creditor Germany has insisted that aid must come with strings attached, and other European countries have provisionally backed a list of reforms proposed by Athens. Germany's parliament is expected to give its approval on Friday.

Ms Merkel said that "we must continue along this road" but it "will of course remain challenging, I have no illusions about that".

Press Association

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