International Monetary Fund’s Senior Representative for Greece Bob Traa (left) arrives at the Finance Ministry in Athens yesterday.
ATHENS: Greece played down yesterday the impact of the collapse of a major privatisation sale on the country’s finances, saying it would not spark new budget cuts and tax rises to meet debt-rescue conditions.
But the European Commission said that the failure of the process, which blows a hole in budgeting, was an issue.
“Certain jokes have been heard that new measures will be taken because of (this) entanglement,” Prime Minister Antonis Samaras told reporters just as EU-IMF auditors review progress on reforms.
Samaras was referring to the privatisation of Greece’s gas distributor DEPA, which fell through on Monday after Russian giant Gazprom pulled out of the bidding process.
The setback could cause a shortfall of at least ¤700m ($912m) in the ¤2.6bn Greece needs raise this year under the terms of its EU-IMF fiscal bailout.
It came as a mission from the so-called troika of creditors —the EU, IMF and the European Central Bank — began a scheduled audit of Greek reforms and fiscal performance that will determine the payment of the next instalment of rescue funding under bailout agreements.
The spokesman for EU Economic Affairs Commissioner Olli Rehn said that the failure of the sale would “clearly be discussed” during the audit.
“The Greek authorities will now have to assess what has happened ... and how best to address it...right now our message is that we would like (the process) to resume as soon as possible,” spokesman Simon O’ Connor told reporters in Brussels.
A Greek government source earlier said it was “practically impossible” to find a buyer for DEPA this year.
Greek media had earlier raised the prospect of additional budget cuts this year to make up the expected shortfall from the sale failure. The Athens stock exchange was shedding 4.46 percent of its value yesterday. It had registered a 4.69-percent drop on Monday.
Gazprom said on Monday that it was worried by mounting unpaid bills owed to DEPA by independent electricity producers and industry. “We did not receive adequate guarantees that DEPA’s financial situation will not deteriorate until the deal is concluded,” said Gazprom spokesman Sergei Kupriyanov.
“The takeover procedure could last another year after the end of the tender,” he added. “The company is already burdened with unpaid customer bills.”
AFP
