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2011-12-30 - 11:26:00 - DJ German MP Criticizes Greek Privatization Efforts, Patience Might End
 

DJ German MP Criticizes Greek Privatization Efforts, Patience Might End


BERLIN (Dow Jones)--Greece's privatization efforts aimed at debt reduction are insufficient and the European Union should assume responsibility for these privatizations, a German lawmaker and financial expert of Chancellor Angela Merkel's ruling center-right coalition government said Friday.

"Athens can't expect to be permanently accommodated from other EU states while it more or less twiddles its thumbs," lawmaker Hans Michelbach said in a statement. "European partners are still willing to show solidarity, but solidarity is no one-way road. Athens has to watch out that its partners don't lose patience for good."

He demanded the establishment of an "independent, European trust institution which should handle the privatization of Greek state-owned companies and stakes."

"The EU and IMF freed up another trance of aid money after giving a favorable assessment of the situation at the beginning of December," said Michelbach, who is a member of Bavaria's Christian Social Union, the sister party to Merkel's Christian Democrats. "They have trusted the promises, but Athens has hardly walked the talk."

He said competition hurdles and access barriers continue to exist.

Germany has demanded strict budget consolidation and reforms from Greece in exchange for its support for the debt-ridden company. Markets speculate whether the country might be heading toward a default on its debt.

His warning also comes after it emerged that according to two officials familiar with the situation, the International Monetary Fund recently told the Greek government that a worsening economic outlook suggests the beleaguered nation may be unable to reduce its debt to sustainable levels even with a planned 50% write-down in privately-held Greek government bonds.

"A 50% haircut may no longer be enough" to bring Greece's debt to sustainable levels given the new IMF economic forecasts, said one of the officials.


-By Andrea Thomas, Dow Jones Newswires; +49-30-2888-4126; andrea.thomas@dowjones.com

(Ian Talley in Washington and Costas Paris in London contributed to this article.)


(END) Dow Jones Newswires

December 30, 2011 06:26 ET (11:26 GMT)

Copyright (c) 2011 Dow Jones & Company, Inc.

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