Wednesday, 31 August 2016

Greece May Face Aid-Payout Delay as EU Warns on Backsliding

In World Economy News 31/08/2016

Greece’s finance chief said the next international aid payout to the country may be delayed as the European Union stepped up warnings about domestic political meddling in the Greek state.
Finance Minister Euclid Tsakalotos raised the possibility of the government in Athens failing to qualify on time for a 2.8 billion-euro ($3.1 billion) disbursement due in September from the euro area. That’s what remains of a 10.3 billion-euro tranche that finance ministers approved in principle three months ago.
“If there is a delay, it’ll be days not weeks,” Tsakalotos told Bloomberg News in Brussels on Monday before a meeting with EU Economic Affairs Commissioner Pierre Moscovici. “Part of the reason for the meeting is to discuss the process to ensure there aren’t delays.”
Slipping timetables have been a regular feature of loan payouts to Greece since it first turned to the euro area and the International Monetary Fund for a rescue in 2010. Now in it’s third bailout, the country faces continued creditor warnings about backsliding on overhauls that are a condition for aid.
Greek Modernization

The European Commission sent the latest salvo to Athens, saying on Monday that criticism of the former head of Greece’s statistical agency by allies of Prime Minister Alexis Tsipras risks undermining the credibility of Greek fiscal data. The commission, the EU’s executive arm, said the Greek government must push ahead under its aid program with commitments to curb political interference in administrative matters.
“The commission has long urged the implementation of the pillar of the program related to the modernization of the Greek state and public administration,” Margaritis Schinas, chief spokesman at the 28-nation body, told reporters in Brussels. “This also includes the need to depoliticize the Greek administration.”
The political controversy centers on Andreas Georgiou, who faces felony charges in Greece for reporting a 2009 budget deficit that was more than five times the EU limit and that unleashed the euro-area debt crisis. The EU has vouched for data submitted by the Hellenic Statistical Authority under Georgiou from 2010 to 2015 and validated by EU statistics office Eurostat.
Greek Minister of State Nikos Pappas, Tsipras’s closest aide, asked publicly in early August whether Georgiou inflated the spending gap to force the country into a rescue. Avgi, a newspaper affiliated with Tsipras’s anti-austerity Syriza party, labeled Georgiou an “executioner” in an Aug. 4 editorial.
The Greek government has committed to “upholding confidence in Greek statistics and defending them against any efforts to undermine their credibility,” according to an agreement in June between Athens and its international budget auditors. The depoliticization of the public administration is one of main targets set in the latest Greek bailout, according to a joint statement by euro-area leaders in July 2015.
Finance ministers from the currency bloc will discuss the matter when they meet on Sept. 9 in Bratislava, Slovakia, Schinas said. He reiterated the commission’s confidence in data produced since 2010 by the Hellenic Statistical Authority, also known as Elstat. The quality of the 2010-2015 data “is beyond any doubt,” Schinas said.
“The commission does not as a matter of principle comment on national legal proceedings and does not ask a member-state government to do so,” he said. “We are, however, concerned about statements in the media regarding the case that call into question the reliability of Elstat data.”

Source: Bloomberg