Mistakes made in Greek bailout, ex-eurozone chief says

ATHENS, Greece - Former eurozone President Jean-Claude Juncker conceded Tuesday that mistakes were made in the bailout of Greece - days after a similar admission by the International Monetary Fund.

The Luxembourg prime minister, who played a central role in the 2010 bailout through his position as the head of the grouping of the euro finance ministers, said the European Union and the IMF were “overly optimistic” in the earlystages of the bailout process.

But Juncker, who stepped down as the eurozone president earlier this year, insisted the $317 billion rescue program had met its basic aim of keeping Greece a member of Europe’s single currency.

His remarks during a visit to Athens come after last week’s admission from the IMF that the Greek rescue deal had failed to restructure the country’s national debt early enough and overestimated the capacity of the Greek government to swiftly push through public sector and market reforms that had been neglected for decades.

A spat has since developed between the EU and the IMF, with the Washington-based institution also pressing Europeans to be more specific about any further debt relief that may be awarded to Greece next year.

“It is true that the issues raised by the IMF are important ones,” Juncker said. “There were mistakes. But who would not have made mistakes given the situation that Greece was in ?”

Greece’s conservative-led government has promised a return to growth and the international bond markets next year. Though the harsh austerity measures of spending cuts and tax raises have helped reduce the country’s budget deficit, they have taken a big toll on the Greek economy - Greece is in its sixth year of a deep recession, and unemployment has risen to 27 percent, with nearly two-thirds of under-25s out of work.

Th e government announced Tuesday it will close down all its state-run TV and radio stations, with the loss of some 2,500 jobs, as part of its cost-cutting drive demanded by the country’s international creditors.

The announcement widened cracks in the year-old conservative-led governing coalition, with both minority partners condemning the suspension of Hellenic Broadcasting Corp.

Nonetheless, government spokesman Simos Kedikoglou - a former state TV journalist - described the organization as a “haven of waste” and said its TV and radio signals would go dead early today. He said its 2,500 employees will be compensated, and the company will reopen “as soon as possible” with a smaller work force.

It was not immediately clear how long that would take.

Left-wing opposition leader Alexis Tsipras renewed demands for the government to scrap austerity measures, describing the EU-IMF program in Greece as a blueprint for further advancing privatization and cutting labor rights across Europe.

“It’s an effort to weaken the welfare state. … These neo-liberal reforms are being added to a state foundation built on patronage, making it even harder to serve the public’s needs,” Tsipras said late Monday in the southern city of Nafplio.

EU and IMF inspectors are currently in Greece to press for faster implementation of programs to fire civil servants and privatize state companies. Information for this article was contributed by Nicholas Paphitis of The Associated Press.

Business, Pages 27 on 06/12/2013

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