NEWS

Pressure on Greek gov't to catch up on reforms

TAGS: Politics, Economy

Representatives of Greece’s creditors have increased the pressure on Greek authorities to push through a new slew of reforms over the coming weeks to qualify for the next tranche of 2.8 billion euros in rescue funding as progress is already behind schedule.

Meanwhile, in a 10-page letter to the mission chiefs for Greece, published in the newspaper Ependisi on Saturday, Finance Minister Euclid Tsakalotos has accused members of the creditors’ technical teams in Athens of undermining negotiations on reforms. According to Tsakalotos’s letter, the technical staff have called for the reversal of certain new laws and for new legal interventions, and have made “absurd” demands.

Creditors are pushing for progress on a series of milestones by early August. A high-ranking representative of Greece’s creditors told Kathimerini that “there will be no excuse” if progress is not achieved over the summer. Foreign auditors are particularly worried that the impact of a decision by Britons to leave the European Union, a so-called Brexit, will create further uncertainty and undermine momentum in the Greek program.

Meanwhile, Germany’s Vice-Chancellor Sigmar Gabriel, who visited Athens last week, told Ta Nea daily that “there is no question of Grexit.” He was referring to renewed speculation about the prospects of a possible Greek exit from the euro in the wake of the Brexit decision.

The milestones that Greece needs to tick off over the coming weeks include the approval of the privatization of state-run power grid operator ADMIE and the appointment of staff to a supervisory board for Greece’s new privatization fund, as well as the transfer into this fund of a second set of public utilities.

According to the original plan, these actions should have been taken by the end of June.

The most politically contentious of the actions Greece must take are changes to labor laws, introducing greater flexibility for employers to hire and fire.

A government official told Kathimerini that not only Athens is to blame for the slow progress. “There is a problem with micro-management but that does not only relate to us, it relates to the institutions too,” the official said, referring to the country’s creditors. “For things to move faster, the assessment of our proposals and draft laws must be swifter from their side.”

According to sources, Prime Minister Alexis Tsipras and his Italian counterpart Matteo Renzi briefly discussed the possibility of forming an alliance of southern European countries during a summit of EU leaders on the Brexit issue in Brussels last week. The matter is to be further explored later this week at a meeting expected to be attended by French President Francois Hollande, Kathimerini understands.

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