Greek leader faces criticism on austerity concessions

AP News
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Posted: Feb 25, 2015 4:26 PM
Greek leader faces criticism on austerity concessions

ATHENS, Greece (AP) — Greece's prime minister held a marathon meeting with his party's lawmakers Wednesday, briefing them on pledges made to European creditors to win a four-month extension of the country's bailout amid simmering party discontent over what some see as a capitulation.

The meeting, which was held behind closed doors, lasted more than 11 hours.

Prime Minister Alexis Tsipras, elected last month on the promise to repeal bailout austerity measures, including spending cuts and tax hikes, has been at pains to persuade hardliners in his radical left Syriza party that Greece succeeded in its European negotiations.

Greece won its extension Tuesday by pledging a series of policy measures, including adherence to certain reforms and highlighting its will to crack down on corruption and tax evasion. It also promised not roll back privatizations as it had promised before being elected on Jan. 25 and not take any unilateral action without consulting with Greece's creditors.

But some party members and ministers have insisted election promises should be kept.

Energy and Environment Minister Panagiotis Lafazanis, a party hardliner, has repeated he will not go ahead with privatizations, which were part of initial requirements for the 240 billion euro (currently $272 billion) bailout.

Lafazanis told the daily Ethnos newspaper that the privatization of the power grid and of the country's power utility would be halted as final binding bids had not yet been submitted.

Finance Minister Yanis Varoufakis, speaking on RealFM radio Wednesday, said the policy measures list he sent to Brussels to win the extension included "constructive ambiguity" on the issue of privatizations. The text of Varoufakis' letter to Brussels says completed privatizations will not be rolled back and for those where tenders have already been launched, "the government will respect the process, according to the law."

"The law gives the government possibilities to both change the terms of the procedure and at some point to check the legality of this procedure," Varoufakis said. "Our position is very simple. The sell-off of family silver at rock-bottom prices and in a way that doesn't lead to development for the economy must stop."

The most direct, and symbolically damaging, criticism came over the weekend from Syriza's European parliament member Manolis Glezos, famed in Greece for removing the Nazi flag from atop the Acropolis during the German occupation in World War II.

Glezos wrote an open letter over the weekend publicly apologizing to the Greek people for backing what he said was the "illusion" that the hated bailout austerity measures would be immediately repealed.

Greece's list of policy goals is being used as a starting point for the creation of new reform measures the Greek parliament will have to vote into law.

The International Monetary Fund and the European Central Bank, both bailout contributors, have expressed reservations about the Greek pledges, saying they were enough to approve the extension but were vague and needed to be translated into concrete action.

Without the four-month bailout extension, Greece faced the possibility of bankruptcy, limits on bank transactions and even a potential exit from euro, the joint currency used by 19 European nations.

German Chancellor Angela Merkel, whose country is the largest single contributor to Greece's rescue loans, said she was glad the eurozone "found a starting point for negotiations with the new government."

But, she said, much work lay ahead.

"We must continue along this road," Merkel said, adding that "will of course remain challenging, I have no illusions about that."

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Geir Moulson in Berlin contributed to this report.