Greece offers privatization concession as Germany stays tough

Thu May 14, 2015 12:20pm EDT
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By Renee Maltezou and Lefteris Papadimas

ATHENS (Reuters) - Greece on Thursday offered a concession to its international lenders by pushing ahead with the sale of its biggest port, Piraeus.

Greece has asked three firms to submit bids for a majority stake in the port, a senior privatization official told Reuters, unblocking a major sale of a public asset as the EU and the IMF demand economic reforms from Athens.

Despite the conciliatory move, Germany's Bundesbank showed no sign of easing off on its hardline stance toward Greece.

Bundesbank chief Jens Weidmann criticised weekly top-ups of emergency funding to Greek banks, saying in a German newspaper interview that this broke a taboo against the European central banking system financing governments.

Greek banks have been drawing emergency liquidity assistance from the country's central bank, a funding lifeline provided in exchange for collateral. Greek banks have been using the money to buy short-term government debt, helping to keep the country's finances afloat.

The ECB has been raising the cap on the funds weekly, most recently on Tuesday by 1.1. billion euros to 80 billion euros, but Weidmann questioned this.

"Given the ban on monetary financing of states, I don't think it's OK that banks which don't have access to the markets are being granted loans which then finance the bonds of their government, which doesn't have access to the markets itself,"

Weidmann told Handelsblatt.   Continued...

People make their way past a small European Union flag on Constitution (Syntagma) Square, with the parliament building seen in the background, in Athens May 11, 2015.  REUTERS/Alkis Konstantinidis