Energy issues, on hold, must be cleared for review conclusion

Disagreements and pending issues concerning bailout-related energy sector measures are high on the agenda and will need to be overcome if the ongoing and prolonged second review of Greece’s program is to be concluded, European Commission officials have underlined.

Creditor representatives cannot be expected to return to Athens in the effort to conclude the bailout’s second review unless the pending energy issues are resolved, an official in Brussels has pointed out.

A decision by finance minister Euclid Tsakalotos, his deputy Giorgos Houliarakis, as well as labor minister Efi Achtsioglou to remain in Brussels yesterday appears to be linked to an effort aimed at settling pending labor issues. A team of IMF officials is currently also in Brussels. It has become apparent that the Greek bailout’s second review will not be concluded unless the IMF offers its approval, especially on labor measures.

This does not appear to be the case with the energy-sector issues. Convergence with the European Commission on a schedule mapping out a sale plan for main power utility PPC units would suffice for an agreement at a technical level.

Also yesterday, energy minister Giorgos Stathakis was in Berlin to participate in an energy conference before heading to Italy following an invitation by Italian multinational oil and gas company Eni to discuss hydrocarbon prospects.

Though Greece’s energy issues appear to have been temporarily placed aside as government officials grapple with the lenders on labor matters, the second review’s finalization cannot be expected without an agreement on the future of Greece’s electricity market and PPC.

According to sources and leaks, government officials have now realized that the lenders will not tolerate any further maneuvering from the Greek side that could delay the implementation of inevitable structural reforms needed to support the electricity market’s liberalization.

Certain sources claim that PPC has already begun preparing a portfolio of company units to be sold. Utility officials hope a downsize will reshape the corporation as a leaner but meaner enterprise.