EU, IMF seek to repair Greek rift after asset sale furore

ATHENS, (AFP) - The European Commission and International Monetary Fund hastened to placate debt-hit Greece after the government bristled at a suggestion that it embark on a huge assets sale.

The Commission, the IMF and the European Central Bank, issued a statement expressing “the deepest respect” for the “tremendous” fiscal overhaul the government had undertaken.

The three, known as the ‘troika’ in Greece, are supervising Greece’s tough austerity programme and were reacting to a row that blew up on Friday.

One of their auditors said the Greek state should sell assets worth 50 billion euros ($68 billion) to reduce its rampant debt.

But that is a figure far beyond anything the government had indicated so far.

The joint statement from the troika was clearly designed to pour oil on the troubled waters. Greece’s austerity measures were based on “mutual trust”, they said.

“Our three institutions have full respect for the prerogatives and initiatives of the Government in all areas of economic decision-making, and our role is to advise and support the government while considering options during the decision-making process,” they added.

“It is regrettable if a different impression was perceived at any time.

“We recognize the difficult challenges facing the Greek economy and we have the deepest respect for the tremendous efforts being made by the Greek people. We continue to support those efforts.”Curiously Athens, which last year accepted the supervised reforms in return for a massive rescue loan, had at first seemed to take the sell-off demand in its stride.

An unofficial document released by the finance ministry immediately after Friday’s joint news conference even said a “portfolio” of assets worth “at least 50 billion euros” would be created to this effect.

On Saturday morning however, as the Greek press and opposition figures savaged the proposal, government spokesman George Petalotis objected that the call amounted to interference in Greek affairs.

Greek Prime Minister George Papandreou on Saturday said he had protested to the International Monetary Fund and the EU over the “unacceptable behaviour” of the troika representatives.

And on Sunday, Finance Minister George Papaconstantinou turned his fire on the European Commission representative after he repeated calls for the enormous asset sale in statements to two Greek newspapers.

“Alleged comments by the representative of the European Union to Sunday papers are at least off the mark, and certainly inaccurate,” Papaconstantinou said in a statement.

“We are exploiting state real estate, not selling state land. And the decisions regarding what and how are taken in co-ordinated fashion by the Greek government, nobody else,” the minister said.

In one interview to To Vima daily, Deroose had encouraged the Greek state to “sell beaches to develop tourism and the tourism housing market.”The Proto Thema daily also quoted Deroose as saying that Greece could make five billion euros by selling off the former Athens airport, which lies on a lucrative expanse on the capital’s southern coast.

Another 35 billion euro could be raised from the sale of other state lands, regional airports and ports, he said.

And IMF mission chief Poul Thomsen also said Greece should “sell land, including the (former) airport,” in statements to Kathimerini daily.

“We are now at a critical junction where we need to see the acceleration of reforms,” Thomsen said.

Greece had so far already earmarked several state properties for sale but only planned auctions worth seven billion euros over the next three years.

It was the first time since Greece’s debt rescue in May that the two sides seemed to be at odds over what the next steps of Greek economic recovery should entail.

Greece’s public debt stands at around 300 billion euros after years of large public deficits that in 2009 stood at 15.4 percent of output, more than five times the allowed EU level.