Greece accelerates asset sales as pressure grows

As Greece teeters on the verge of a second European Union (EU) and International Monetary Fund (IMF) bailout, the government has pledged to accelerate its privatisation programme in a bid to raise up to €50 billion by 2015 to help reduce its debt pile.

As such, the government has announced that it will appoint advisers for infrastructure assets including the sale of a 17 percent stake in PPC, the country’s leading electricity producer and sole grid operator; the sale of the state’s 74 percent stakes in Piraeus and Thessaloniki ports, which may also include sales of adjoining regional ports; and the divestment of “significant” stakes in the Thessaloniki and Athens water and sewage companies, in which the government owns 74 percent and 61 percent respectively.

Advisers have already been appointed for the extension of the concession and further privatisation of Athens International Airport; the sale of Hellinikon Airport, also in Athens; the restructuring and subsequent sale of Hellenic Railways, the country’s railways operator; and the privatisation of Hellenic Motorways, which holds the concessions for several roads across the country.

The majority (about €35 billion) of Greece’s privatisation proceeds are expected to come from real estate sales.

Greece’s renewed privatisation drive comes as the country is widely reported to become the recipient of a new bailout loan from the EU and IMF. However, according to multiple reports the new loan will come with certain strings attached, including outside intervention in Greece’s privatisation programme, which has been proceeding slowly. This may include setting up an independent fund or company to oversee the privatisation effort.

“The best way forward is for an independent agency to make the decisions. The local politicians have been dragging their feet because they know the Greek people are against state sell-offs. I think there is a good chance that external involvement will be agreed and that things can start properly soon,” a banker working on the privatisations programme told Reuters.

Asset sales was already a condition of the original €110 billion bailout of Greece by the European Union and the International Monetary Fund last May, which saved the country from its spiralling debt crisis.