Greece calls in Italian heavyweight

Prime Minister George Papandreou will appoint former Italian Finance Minister Tommaso Padoa-Schioppa as an economic adviser in a move seen boosting the government’s know-how in its battle to get through the debt crisis. The appointment was announced as officials from the European Union, European Central Bank (ECB) and International Monetary Fund (IMF) wound up an inspection in Athens. They are reviewing austerity measures which Greece is enacting in order to get international rescue loans worth 110 billion euros over three years. According to a government statement, 70-year-old Padoa-Schioppa will advise Papandreou on the economy, banks and debt management. «He will offer advice to the prime minister on matters of political planning relating to the implementation of fiscal and structural policy as part of the European support mechanism,» Papandreou’s office said yesterday. Padoa-Schioppa was a minister in Italy’s center-left government from 2006 to 2008 and a former policymaker at the ECB. He has served as director-general for economy and finance at the EU, vice director-general of the Bank of Italy, president of Italy’s bourse watchdog Consob and president of the IMF’s monetary and finance committee. «This is a positive choice,» Gikas Hardouvelis, chief economist at Greek lender Eurobank EFG, told Reuters. «He has held senior positions and knows how macroeconomics and financial markets work.» News of the appointment came as officials from the ECB, EU and IMF – dubbed by local press as the «troika» – met with Finance Minister Giorgos Papaconstantinou late yesterday. In a report to be issued soon on Greece’s progress, the troika is expected to urge Greece to pick up its income collection efforts as budget revenues are trailing well behind annual targets due to the deepening recession. The government has managed to slash the deficit by around 46 percent year-on-year in the January-June period, mainly due to a 4-billion-euro clampdown on government expenditure. Sources said that the report is also likely to focus on the need for structural reforms, such as the opening up of closed professions. The government yesterday got a vote of confidence from Luxembourg’s Jean-Claude Juncker, head of the eurozone’s finance ministers, who said that he is «very satisfied» with the deficit reductions Greece is making. The cuts have been «beyond expectations,» he told reporters in Luxembourg. The eurozone nations «have further wishes as to structural reforms» to be undertaken by the Greek government, Juncker said.