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Greece to increase privatisation

As Greece scrapes together the money for the third payment bailout, the revival of the privatisation program may help to rebuild creditors’ trust.

Greece is aiming to lease 14 regional airports and a majority stake in the port of Piraeus by the end of the year, as the Government endeavours to encourage asset sales in order to raise capital towards the country’s debt repayments.

Next year, officials in Athens are hoping to raise €3.5billion towards paying off the bailout.

Theodoros Stamatiou, Senior Economist at Eurobank Ergasias SA has said: “The willingness of the Government to continue the privatisations will signal its credibility and the ability to take ownership of Greece’s third economic adjustment program. The current series of privatisations will signal to foreign investors that the government is willing to do business with the international markets” [1].

European financial officials will consider this week whether the Government has fulfilled the legislation required for release of the next €2billion pay-out. This will be a crucial development for accessing another €25billion to recapitalise the banks [1].

The aim is to address the 20-year extension of the concession to operate Athens International Airport and sell a 30pc stake at the air transport hub.

The proceeds from the asset sales will be used to repay some of Greece’s loans, as well as financing future investments.

Greece is looking to manage a new process to extract more money from the economy by the end of November, according to Finance Minister Euclid Tsakalotos. This will mean the Government can take value from state holdings as it looks to use the windfall to help the rest of the economy recover [1].

Tsakalotos added that rather than throwing the money straight into debt servicing, “some of this money has to be used for immediate needs and investments” [1], helping to provide for the Greek economy in the future.

[1] Bloomberg Business. ‘Greeks Aim to Prove They Mean Business Ramping Up Privatisation’. bloomberg.com