Greek reforms hit new setback as privatisation chief resigns

Takis Athanasopoulos quits after being charged with dereliction of duty in former role as chief exectutive of public utility PPC

In another setback for Greece's reforms, the country's privatisation chief Takis Athanasopoulos has resigned after only a few months in the job, after being charged with dereliction of duty in his former role as chief executive of the public utility PPC.

The Greek parliament building. The government's reforms face a new setback with the resignation of privatisation chief Takis Athanasopoulos.

An official at the Greek finance ministry, Giorgos Mergos, also stepped down after being charged. Both men denied knowingly commissioning a loss-making plant when on the board of PPC, which led to losses of more than €100m for the state-owned power company.

Athanasopoulos said he welcomed the charges. "It gives me the opportunity to prove that the interest of the PPC and the state were fully served," he wrote in a resignation letter, insisting his decision to step down had been motivated by the desire not to further impede Greece's problem-plagued privatisation process.

The Greek finance minister, Yannis Stournaras, is under pressure to clean up corruption from international creditors keeping Greece's debt-stricken economy afloat.

The departures are a fresh blow for the privatisation agency following successive changes of administration since its creation two years ago.

The sale of state assets is among the issues being discussed between Stournaras and visiting inspectors from the country's "troika" of lenders at the EU, ECB and IMF.

The talks will determine whether Greece receives €2.8bn aid at the end of March. The country's debt load is expected to rise to a staggering 185% of GDP this year.

Greece's privatisation programme aimed to raise €50bn by 2015 through the sale of publicly owned properties ranging from islands to former royal palaces and hotels. But foot-dragging, red tape and at times outright resistance have repeatedly obstructed progress, with Athens reducing the target to €19bn by 2015. A mere €1.6bn has been raised since the debt crisis began three years ago.

The resignations come just as headway was beginning to be made with the entity recently completing its first international deal in almost 15 years, leasing a prime plot on the popular island of Corfu.

Last month, the Fund succeeded in luring back Qatar to the table with Doha announcing that it would participate in an international tender for the development of Athens' former airport at Hellenikon, the country's biggest privatisation project.

Athanasopoulos, who faces a maximum sentence of life in prison, is expected to be replaced on Monday.

Amid popular anger at an elite perceived to have brought Greece to the brink of bankruptcy, prosecutions of politicians and businessmen have accelerated in recent months. Public figures, including the former mayor of Thessaloniki and former defence minister, have received long prison sentences after being found guilty of fraud and corruption.

Prime Minister Antonis Samaras said at the weekend that while Greece's predicament has improved dramatically since the summer "it is out of intensive care but it is not out of the hospital yet."

Highlighting the country's fragile state, one of German Chancellor Angela Merkel's senior allies insisted at the weekend that Athens remained the biggest risk for the euro zone despite the stabilization of its economic and political scene.

"The greatest risk for the euro is still Greece … I still believe that Greece's exit would be a possible long-term alternative for Europe and for Greece itself," Alexander Dobrindt, a leading conservative told Die Welt am Sonnrag newspaper.

"We have created a situation that gives Greece a chance to return to stability and restore competitiveness. But I still hold that, if Greece is not able or willing to restore stability, then there must be a way outside the euro zone."