Germany insists on Greek privatisation goal of 50 billion euros

BERLIN (Reuters) - Germany has dismissed any suggestion that Greece could lower its target of 50 billion euros in privatisation revenues, part of its third bailout package, raising tensions as international lenders review Greek reform efforts.

Greek Presidential guards take part in a ceremonial change of guards at the Monument of the Unknown Soldier in front of the Parliament building in Athens, Greece, August 23, 2015. REUTERS/Stoyan Nenov

Greek Economy Minister George Stathakis said in Berlin on Tuesday the estimates had already been lowered and that Athens was looking at around 15 billion euros and may end up with just 6 or 7 billion euros from the privatisations.

A German Finance Ministry spokeswoman said on Wednesday the Greek government had agreed last year with its lenders that the programme’s Memorandum of Understanding included the 50 billion euros in privatisation revenue.

“As far as we are concerned, this Memorandum of Understanding is still valid,” Friederike von Thiesenhausen said at a government news conference.

In Athens, when asked to clarify Stathakis’ comments, an Economy Ministry official repeated the 15 billion euros figure “from privatisations that have been concluded and the ongoing ones”.

Since the recapitalisation of banks have cost Greece 5.5 billion euros and thus far less than the previously projected 25 billion euros, the 50 billion euro target “has changed de facto”, the official said.

Greece has raised a total of about 3.5 billion euros from state asset sales scheme since 2010 and aims to raise another 1.9 billion this year, according to the state budget.

A spokesman for Chancellor Angela Merkel said Berlin’s stance on Greece’s bailout programme remained unchanged after her meeting with International Monetary Fund (IMF) chief Christine Lagarde on Tuesday.

“Our position is that a nominal debt cut for Greece is not possible, also for legal reasons,” Steffen Seibert said, adding that Germany still wanted the IMF to be part of the current bailout programme for Greece.

The IMF has fought shy of participating in the bailout without a firm promise of debt relief for Greece from its euro zone partners. Germany, while keen for the IMF to take part, has said relief cannot be discussed until Athens has demonstrated compliance with the terms of the bailout.

Berlin has signalled that it could be open to some flexibility by extending the maturities of some loans. On Tuesday, Merkel reiterated Germany’s position that a write-down was not possible as long as Greece remained in the euro zone.

Lagarde insisted that what was needed in Greece was “long-term sustainability”, and debt sustainability was important for private sector investors.

Prime Minister Alexis Tsipras hopes a successful review, which will unlock an estimated 5 billion euros in bailout funds, will pave the way for talks on debt relief and convince austerity-weary Greeks that their sacrifices are paying off.

The 5 billion euros are needed to repay loans from the IMF and maturing bonds to the European Central Bank, as well as unpaid domestic bills.

Greece signed up to a bailout worth up to 86 billion euros in 2015, its third international financial lifeline since 2010, which hauled it back from the brink of leaving the euro zone. So far, it has received 21.4 billion of an initial 26 billion euro tranche.

Additional reporting by Madeline Chambers, Gernot Heller in Berlin and Angeliki Koutantou in Athens; Writing by Michael Nienaber; Editing by Alison Williams