Greece is looking for allies on the Council of European Finance Ministers (Ecofin) over the issue of the securitization of debt owed to the state, the use of which European Economic and Monetary Affairs Commissioner Joaquin Almunia voiced objections to last week. Almunia has said that the use of securitization – essentially a 2-billion-euro bond issue to help reduce the 2006 budget debt to below 3 percent of GDP – was unacceptable because Greece ought to reduce debt using long-term measures and not one-off technicalities. However, he approved the use of securitization to cut the deficit in the 2005 budget, saying it was a one-off strategy to make up for a lag in revenues. Finance Minister Giorgos Alogoskoufis chose to be upfront yesterday and present the issue before his Eurogroup colleagues. (The Eurogroup, which met yesterday, is made up of the 12 finance ministers of the eurozone. Ecofin, the finance ministers of all 25 member states meets today.) He claimed that both the Commission and Eurostat had provided assurances to Greece that they would accept the securitization. Eurostat, especially, seems to have agreed, but changed its mind after Almunia’s intervention. Greek officials privately said that they hoped to find at least 10 allies in Ecofin, allowing Greece to gain a counterweight to the Commission and Eurostat. They believe that Greece may become an easy scapegoat for a Commission unable to discipline France and Germany for their own excessive deficits. However, Alogoskoufis will have a difficult task; securitization, besides being a one-off measure, would also burden Greece’s already excessive debt; and the recent shift in emphasis on the EU’s Stability Pact to debt makes it difficult to defend Greece’s position. To compound the problem, Almunia is determined to stick to his position. This looks like a repeat of last year when our EU partners were angered by Alogoskoufis’s audit, were determined to punish Greece for its newly excessive debt and Alogoskoufis was fighting for a more lenient interpretation of the Stability Pact’s terms. In the end, Greece gained a two-year reprieve but, as Almunia reminded us, has since been under close scrutiny.