Spain threatens to block Greece bailout payment

LUXEMBOURG: Spain on Friday threatened to block the latest bailout disbursement to Greece, angry that Athens has failed to drop a legal case against European experts who had worked on the Greek privatization program.

“The payment of the latest tranche will be blocked (without a solution),” said Spanish Economy Minister Luis de Guindos on the sidelines of EU finance minister talks in Luxembourg.

De Guindos told reporters that Spain and Italy had won the support of euro zone partners at marathon talks on Thursday when a €8.5 billion ($9.5 billion) payout to Greece was agreed in principle.

German Finance Minister Wolfgang Schaeuble, the euro zone’s most dominant figure, backed De Guindos.

“Immunity was promised beforehand and such commitments should be fulfilled,” Schaeuble told reporters.

Another top euro zone official said the allegations were “unfair” and that ministers believed the case was politically motivated. The legal case concerns three advisers from Spain, Italy and Slovakia to the Greek privatization agency, created at the insistence of Germany in the wake of the debt crisis in 2011.

Many details of the accusations are unknown, but a Greek legal source said the experts were accused of “disloyalty to the public,” a crime that carries a 20-year jail sentence.

The Greek courts initiated proceedings against the experts in 2014 after alleged irregularities in the sale of 28 real estate properties owned by the Greek state.

Since 2016, a Greek law hands immunity to foreign experts assisting Greece in its bailout program but has no retroactive effect.

“We will find a solution in time,” a Greek government source told AFP on condition of anonymity.

“We are not going to go broke over this case,” the source added.

Payment of the latest tranche of Greece’s €86 billion ($97 billion) bailout still requires the official approval of national parliaments and a final sign off by euro zone ministers, giving Spain a de facto veto for moving forward.