Brussels brings out big stick over tender law

Facing funding freeze, Athens considers delaying ban

Bowing to a major threat from Brussels to freeze European Union funding for major public works in Greece unless Athens amends its controversial new legislation on state contracts, the government said yesterday it might delay implementing the law.

Government spokesman Theodoros Roussopoulos made public a letter, received on Tuesday night, from the head of the Commission’s general directorate for regional policy, Graham Meadows, giving Athens until the end of May to bring the law in line with EU regulations.

Otherwise, the Commission official said, payments from EU structural and cohesion funds for any project affected by the law — which bars media barons from bidding for lucrative state deals and is due to come into effect in July — would be stopped.

“We hope that, by May 31, some common ground will have been found,” Roussopoulos said, echoing hopes expressed by Prime Minister Costas Karamanlis on Monday — following a meeting in Athens with visiting Commission President Jose Manuel Barroso — that a compromise can be achieved.

“If not, the least would be to offer a brief deferral of the law’s implementation,” the spokesman said.

The law passed on January 20 was the ruling conservatives’ proudest achievement in their first year in office, and the spearhead of New Democracy’s keystone anti-corruption campaign. To a great extent born from ND’s conviction that, under the previous, Socialist administration, construction and publishing moguls who maintained close ties with the government had won many high-budget state contracts by using their media clout, it was seen as targeting specific business interests.

Following complaints from Greek and Italian firms, the Commission opined that the law broke EU internal market regulations and should be changed. Brussels proceeded to launch the infringement process against Greece, which could lead to action before the European Court of Justice, brushing aside arguments from Athens that the law simply implemented a dictate of the constitution, as revised by PASOK in 2001.

But Meadows’s letter made no mention of the constitution — which, Athens claims, prevails over EU law — while clarifying that a previous, less stringent ban passed into law by PASOK was also problematic.

Yesterday, Roussopoulos insisted that “under no circumstances will we alter our strategic aim and abandon our struggle for transparency.”

And he ruled out the prospect of Interior Minister Prokopis Pavlopoulos — who drafted the law — losing his job.

Meanwhile, opposition leader George Papandreou charged that the government had been forced into “a disorderly retreat” as a result of its “hypocrisy, incompetence and spitefulness.”