Greece needs bolder privatisation plan to get aid - source - The Best from Greece

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Posted on: 20/May/2011

At stake is a 12 billion euro aid tranche Greece hopes to get in June to meet refinancing needs, with the debt-choked country under increasing pressure from its peers to step up reforms to get back on track with its bailout plan.

The inspection visit, described by Greek officials as the toughest review to date of Athens' progress on the 110 billion euro bailout, has already been prolonged. Officials hope it can be concluded some time next week but can give no target date.

"On privatisations, we are waiting for a big bang from the government," a source with direct knowledge of the inspection visit said.

Senior EU policymakers are pressing Greece to show it will deliver on a plan to raise 50 billion euros from privatisations by 2015. Athens appointed financial advisors for a host of privatisation projects on Wednesday.

"Greece has moved forward but they are still not there," the source said, adding that the government must present a "plausible and credible plan" saying which companies will be privatised and which land plots could be sold or leased.

"Until we get this, the mission will not be concluded," the source said.

Government spokesman Yiorgos Petalotis told reporters on Thursday that Athens planned to outline its mid-term fiscal and privatisation plan early next week.

Dutch Finance Minister Jan Kees de Jager proposed to his European counterpart on Monday that an independent organisation should take control of the sale of Greek state assets, a minister spokesman said on Thursday.

"Support among countries is growing for this idea but Greece is not happy with it. In particular with other triple A-rated countries, support is growing," the minister spokesman said.

A Greek government official said that a committee will be set up to oversee privatisations but it was not clear to what extent foreign officials would be involved. Other sources said several options were envisaged but nothing had been decided.

Greece must also still agree with the EU/IMF/ECB troika on the detail of a 2011-2015 fiscal plan, on which progress has been made, an IMF spokesperson said, adding that Greece had made proposals to deal with structural problems in the public sector.

"Further technical work will be necessary to develop these proposals in more detail," the spokesperson said.

The IMF warned Greece on Wednesday that it would fail to shore up its finances unless it redoubled reform efforts.


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