Hard for Greece to avoid privatisation, pension reform – EU officials

BRUSSELS: Greece can choose its own reforms to unblock the f low of loans from international credi tors and st ave of f bankruptcy, but it will have a hard time avoiding privatisations and a pension reform because of their budget impact, European officials said.

A new left-wing government and euro zone creditors agreed last week that Athens would present within days a list of its own reforms that must achieve similar fiscal results to the measures agreed by the previous conservative-led cabinet.

“The la st government did not complete the ‘ prior actions’ necessary for the final disbursement. Nothing has changed, the prior actions are the same. But the measures can be changed if they do not jeopardise debt sustainability,” one euro zone official said.

Which reforms to choose is politically sensitive because the Syriza party of Prime Minister Alexis Tsipras won a general election in January on a platform of ending the policies of its predecessors, including budget austerity and measures it regards as recessionary.

If the creditors agree the substitute plans will achieve an impact equivalent to the previously agreed measures, Greece would get more loans from the euro zone and the International Monetary Fund, averting bankruptcy and a possible euro exit.

The starting point for talks with the IMF, the European Central Bank and the European Commission – ‘ the institutions’ – is a long list agreed to by Tsipras’ predecessors.

“They need to persuade the institutions that some of the measures should not be undertaken – to be either dropped, or supplemented by others,” one senior euro zone official said.

Privatisation is likely to be one of the major hurdles, officials said, because it was due to contribute 4 billion euros to the budget this year alone.

The Tsipras government does not want to sell state assets, although it has agreed in principle not to stop sales that had been initiated already. — Reuters