Spanish opposition warn of privatisation halt

AFP, Tuesday 27 Sep 2011

Prospective finance minister slams the 'haste' of the current government's sale of state-owned assets as it tries to raise $16 billion

Spain's conservative opposition Popular Party warned Tuesday it will halt huge privatisations of the national lottery and airports if -- as expected -- it wins 20 November general elections.

The Socialist government plans to sell off massive chunks of the state-owned assets to raise 12 billion euros (US$16 billion) and help slash the public deficit.

"These privatisations must stop," said Cristobal Montoro, the Popular Party's economic coordinator whose name is among those being tipped as future finance minister if the Socialists are ousted.

"It is not appropriate to do privatisations in an election period," he told a forum organised by the Cinco Dias business daily.

Montoro said he could not understand the "haste" of the Spanish government's privatisation programme, which he said "raised suspicions".

The government launched in July the process to privatise 49 per cent of the airport operator AENA and the Madrid and Barcelona airports, which it expected to bring in at least 5.3 billion euros.

On Friday, it also approved the sale of up to 30 per cent of the capital of the national lottery, Loterias y Apuestas del Estado, to rake in another seven billion euros in the biggest privatisation in Spanish history.

The privatisations would mean "selling state assets at a loss," said Montoro.

"It is totally unacceptable," he added.

"So that everyone understands what we are talking about, where there is misappropriation of public funds we will look into it."

In general, he said, the Popular Party will "re-examine the process" of privatisations still under way if it wins government.

The listing of the state lottery has been brought forward to October from November while the sale of 90.5 per cent of the Madrid and Barcelona airports is scheduled for the end of November.

Spain's government has not given a timetable for the privatisation of AENA although it said in July that the timing and size of the sale would depend on market conditions so as to seek the best valuation.

Spain has promised to reduce its annual public deficit from the equivalent of 9.2 per cent of gross domestic product last year to 6.0 per cent of GDP this year, 4.0 per cent in 2012 and 3.0 per cent -- the EU limit -- in 2013.

It is now scrambling to raise extra money in 2011 to meet those targets -- telling firms to pay tax installments early, lowering state spending on medicines and stimulating new home purchases with a tax cut.

Each year of deficit pushes up overall debt, which grew to 65.2 per cent of GDP as of June 30 from 57.2 per cent a year earlier.

Earlier this month, the government passed a constitutional reform to limit future budget deficits and curb the accumulated debt, trying to prove its determination never to slide deep into the red again.

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