Athens draws praise for its austerity drive

As the government drew international praise over the weekend for its tenacity in sticking to a tough austerity drive aimed at reviving the debt-stricken economy, speculation mounted over a conversation between Eurogroup chief Jean-Claude Juncker and an unidentified Greek prime minister regarding the difficulty of uprooting widespread corruption in Greece. Meanwhile a senior board member of the European Central Bank, one of Greece’s three international creditors, said that the International Monetary Fund is considering pushing back Greek loan repayments to after 2012. «There are mechanisms in the IMF to prolong packages,» Lorenzo Bini Smaghi said during an IMF-World Bank summit in Washington. At a news conference in Washington on Saturday, Dominique Strauss-Kahn, the IMF’s managing director, said that the Greek government’s efforts to plug a gaping budget deficit were progressing well. «Today Greece is clearly on track and that’s the most important thing that has to be underlined,» Strauss-Kahn said. The chief of the IMF noted however that last week’s revision of deficit and debt figures from previous years was not so encouraging. «It is very unfortunate that the figures are going to be revised,» he remarked. Speaking on the sidelines of the IMF summit in Washington, Greece’s Finance Minister Giorgos Papaconstantinou insisted that his administration is on target to meet fiscal targets despite the data revision. He noted that the spread between Greek government bonds and benchmark German bunds had narrowed to 200 basis points over the past few days. In a related development, it emerged yesterday that officials from Eurostat, the European Commission’s statistics service, are due in Athens this week to determine the true extent of the debt and deficit figures. Meanwhile media speculation mounted about comments made by Juncker on Friday, according to which an unnamed Greek prime minister claimed to be struggling with deep-seated corruption. Juncker said that a conversation with the unidentified premier about possible approaches to the problem had prompted the latter to remark, «I am governing a corrupt country.» Costas Simitis, who was prime minister from 1996 to 2004, yesterday described Juncker’s comments as «nonsense.» Aides of former Premier Costas Karamanlis also denied that he was the subject of Juncker’s comments. Speaking in Washington, Juncker also claimed that top EU officials had been aware of Greece’s financial problems for years but had kept quiet until the crisis broke. «The Greek crisis could have been avoided, but not starting last year, starting two or three decades ago,» he said.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.