In return for the €12 billion released last week – the fifth payment from the €110 billion EU-IMF loan agreed last year – Greece will have to push through a swathe of privatisations reminiscent of the selling of East German firms in the 1990s after the fall of Communism.
‘The sovereignty of Greece will be massively limited’, Jean-Claude Juncker said, just hours after the eurozone ministers reached agreement.
‘For the upcoming wave of privatisation they need a solution modelled on the German Treuhandel’, he said referring to an agency used by Germany to sell off some 14,000 former East German firms, at a huge job and profit loss. In order to make sure Athens follows through on its commitments, the plan will be ‘supplemented by large-scale technical assistance’ from the European Commission and member states.
However, the ministers did not agree the terms of a whole new bailout noting that the ‘precise modalities and scale of private sector involvement’ had yet to be determined.
Agreement is now expected in September although the issue will be discussed again when ministers meet on 11 July.
One of the sticking points is a Finnish demand that it can lend to Greece only if Athens provides collateral. There is also uncertainty over a German-led push to enlist private creditor participation.The People’s Movement has launched a new pamphlet entitled The European Stability Mechanism and the case for an Irish Referendum (click on the title to access).