Greece to launch privatisation drive in weeks: PM

Greece will launch an ambitious sell-off of state assets in weeks that will prove to doubters that the country can make it through a new debt crisis, Prime Minister George Papandreou said Saturday.

He was speaking following talks with visiting Canadian Prime Minister Stephen Harper, a day after Greek political leaders failed to agree on further austerity measures.

Greek prime Minister George Papandreou (R) talks with visiting Canadian Prime Minister Stephen Harper in Athens

The European Union has warned that time was running out to solve a problem threatening the euro currency.

"There is a lot to do, a big privatisation programme that we'll implement in the next few weeks," Papandreou.

"My determination is to continue this programme (...) that will prove to the doomsayers that Greece and Europe can and will make it."

Harper added, "We are very confident that our Greek and European partners can solve the problem."

Greek political leaders failed Friday to agree on further austerity measures to avert a new debt crisis, prompting an EU warning that time was running out to solve a problem threatening the euro.

President Carolos Papoulias had called the talks to bolster support for the government's unpopular austerity measures, required under last year's EU-IMF bailout. The failure jeopardises further funding at a critical juncture.

Despite a year of austerity, Greece's recovery programme appears dead in the water and the IMF has warned it cannot extend more money unless Athens delivers on commitments to stabilise its finances.

"An agreement has to be found soon. Time is running out," EU economic affairs commissioner Olli Rehn said in a statement Friday.

"It is essential for the recovery of the Greek economy that all Greek parties, including the opposition parties, adopt a constructive attitude and support the EU-IMF programme and its implementation."

Papandreou went on national television late Friday to insist that the government would press ahead without delay on the measures sought by the EU and International Monetary Fund.

A quarterly audit of Greek finances by the IMF, EU and European Central Bank officials is heading into an unprecedented fourth week and has yet to approve the release of a fifth loan instalment worth 12 billion euros ($17 billion).

Finance Minister George Papaconstantinou said on the Mega television channel Saturday, "We think we will take the fifth instalment but on condition that the government can do what it has to do."

The IMF warned Thursday that it needed "assurances" from Greece, requiring 12-month visibility that it would get its money back as a condition of providing more funds under the May 2010, 110-billion-euro rescue.

Backers are concerned that Greece has fallen behind in its promised programme of reforms while the bailout package foresees Athens returning to markets next year to refinance some of its massive debt, which now appears unlikely.

Greece needs the next rescue loan instalment this month and the government has warned that its reserves run out in July.

Hoping to convince the bailout troika, Papandreou earlier unveiled a four-year economic adjustment programme that includes a hefty tax hike and a 50-billion-euro state asset privatisation drive.

Opposition parties have mostly refused to support the government in its quest to cut spending by trimming an overblown civil service and the sweeping privatisations attracted even stronger protests.

Workers at various state entities earmarked for full or partial sale have begun mobilising and unions are planning a general strike in June, the third this year against the austerity cuts.

Conservative leader Antonis Samaras has repeatedly stressed he will seek to renegotiate the bailout deal which his New Democracy party feels puts the emphasis on taxation and austerity cuts and neglects growth


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