Trying to convince increasingly sceptical international lenders that it is serious about slashing its debts, Greece named a new privatisation chief today and said it would sell a loss-making bank that has been draining state coffers.

The latest visit to Athens by inspectors from the European Union, European Central Bank and International Monetary Fund has already begun on a sour note, with officials warning Greece is hugely off track in meeting pledges under its €240 billion bailout.

"The situation just goes from bad to worse, and with it the debt ratio," one EU official said."Nothing has been done in Greece for the past three or four months."

Reliant on aid to avoid bankruptcy and an exit from the euro zone, Greece has been under mounting pressure to show its lenders that it has finally mustered the political will to push through reforms under a new conservative-led government.

Prime minister Antonis Samaras's government said today it had decided to sell state-controlled agricultural lender ATEbank. The European Union and IMF have long demanded the bank be restructured.

Rival Piraeus Bank has said in the past it is eyeing ATEbank, and other Greek lenders such as National Bank and Eurobank are also expected to declare their interest.

Mr Samaras's government named banker Yannis Emiris to lead its stalled privatisation drive, replacing Costas Mitropoulos who quit abruptly last week after accusing the administration of blocking his effort to sell off state assets.

Reviving the privatisation drive is a key part of Greece's effort to win back the trust of lenders, who have been forced to bail out the country twice - only to see it fail to meet debt targets and then accuse lenders of sabotaging its economy.

Reuters