By Nick Skrekas
Greeks have been treated to crumbs since its three international lenders of last resort first visited Athens. More shocks came over the weekend.
The International Monetary Fund, the European Commission and the European Central Bank—affectionately known as the troika—with all the arrogance of imperial Roman governors decreed that the debt-strapped Mediterranean country has to “sell off” €50 billion in assets by 2015....
And they fleshed it out too since the total sell-off equates to an eye watering 22% of Greek GDP. Listed and unlisted companies, as well as land: lots of land.
By all informed accounts, the troika said out loud and far too clearly what was meant to be more of a gentlemen’s agreement between them and Finance Minister George Papaconstantinou and his political protector, Prime Minister George Papandreou.
The problem was the media went on the war path and proceeded to whip up national fervor about the best parts of the country being sold off for a pittance. That’s an argument not completely devoid of some merit, given the rock bottom valuations. And there is fertile ground for resentment since a recent poll found 60% of surveyed adults believed it is the troika that is running the country.
And the controversy gets worse for the finance minister and PM. The rest of the cabinet was completely in the dark about this backdoor deal, and in the disarray ministers questioned who was calling the shots. They alleged that national sovereignty had been violated by the money lenders.
The government’s spokesman, George Petalotios, was ordered to snarl back at the troika. But this first communication occurred a full 10 hours after the “unacceptable” troika’s joint press conference.
The government pretended there was a grand rift with the troika, accusing them of interfering in the country’s internal affairs.
Then the prime minister attempted to calm the public on Saturday. He filed a complaint with the EC and the IMF. That’s because, if you believe the latest government version on Monday, the €50 billion privatization program was his idea all along.
There can little doubt that the troika imposed these completely unrealistic targets, plus another dose of unbearable austerity medicine, so Greece would be gifted its fourth €15 billion aid tranche.
And even if the cash-strapped country miraculously raises the €50 billion, it would be a drop in the ocean given Greece’s astronomical €330.1 billion national debt.
Privatization could lead to the collapse of the government’s support among the masses who don’t understand the potential benefits. No one has explained to them that it will attract investment, growth and desperately needed jobs.
To avoid a social upheaval the socialists have to come clean about their plans, explain them clearly and provide real leadership.
Few—other than the Greek privatization chief George Christodoulakis—believe that €50 billion is “doable” and even he denies saying it on the record.
http://blogs.wsj.com
