Privatisations, a long-haul task in debt-wracked Greece

AFP, Sunday 16 Sep 2012

Efforts by Athens to raise money by selling off state assets are failing to attract investors

Greece has relaunched its privatisation programme to appease its bailout creditors, but efforts so far to raise money by selling off state assets have failed to attract investors due to the country's uncertain economic outlook.

The election of a conservative and economically liberal prime minister in June raised expectations in a country where no major privatisation has taken place for several months.
But analysts believe that the year could well end without any significant developments.
During his recent visits to Berlin, Paris and Frankfurt, Prime Minister Antonis Samaras complained it was impossible to attract investors if high-ranking European officials continued to publicly discuss a possible Greek exit from the eurozone.
But over the past few weeks, Europe has adopted a more conciliatory tone towards Athens, while insisting privatisations must speed up.
After five months of inaction, the privatisation fund relaunched its programme lask week and announced the candidates selected for the second phase of the tender process for the key property of the Hellenikon park.
Previous attempts to exploit the Hellenikon, which is almost twice the size of New York's Central Park and borders Athens's southern coastline, have failed.
It also announced candidates for the second round of the tender process concerning a land plot on the island of Corfu, in western Greece.
And the fund's board will meet again on September 19 to try to finalise the details for the sale of the state lottery to private investors.
This process will then prime the tender concerning the sale of 29 percent shares in state gambling operator OPAP.
This relaunching of a privatisation programme that is supposed to bring in 19 billion euros by 2015 comes just as Greece is trying to secure a positive report from the troika of auditors representing its EU, IMF and ECB creditors.
Their report, expected in October, will determine whether Greece, which is facing a fifth year of continuous recession, will receive the next vital instalment from its EU-IMF rescue loans.
"I think there is a real political will by the government to accelerate and have results on privatisation," economist George Pagoulatos, former advisor to the previous prime minister Lucas Papademos, told AFP.
"They understand that a lot of the government's credibility vis-a-vis the European partners is staked on delivering in privatisation," he added.
In July, deputy development minister Notis Mitarakis had admitted that "all these years, Greece did its best to avoid foreign investment."
Greece's failure to create a land register -- despite European funds provided for that purpose -- as well as the bureaucracy, have hindered exploiting public property.
Yet this also spared, to a certain extent, the Greek coastline from the real estate craze that took over Spain and greatly contributed to that country's crisis.
Following Samaras's recent statements concerning the exploitation of Greek uninhabited islands, the fund launched an inventory which, to this day, has evaluated 562 out of 6,000 islands under Greek sovereignty.
The only important privatisation that Greece has carried out in the past two years was the transfer of 10 per cent of Greek telecom OTE to the German company Deutsche Telekom, which was already in possession of 30 per cent.
According to an economist specialising on state sales, who wished to remain anonymous, there will likely not be any progress before another "three or four months."
"We have to stop waiting for an immediate announcement of privatisations, it is a very lengthy process," added the economist.
Each case needs a process of "pre-qualifying the bids, launching them, analysing them, choosing a candidate and then starting negotiations with the buyer."
"Not a single case could be treated in less than a year and the troika (auditors) is well aware of this," said the source.
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