Sell-offs to lead drive to meet bailout targets

The preamble to the coalition government assuming duty was due to end with a confidence vote early Monday, as Prime Minister Antonis Samaras and Finance Minister Yannis Stournaras insisted Greece would not change its loan agreement until it has proved to its lenders that it is committed to meeting fiscal and reform targets. Both men identified an extensive privatization program as being at the forefront of the government’s drive to convince its lenders that progress can be made over the next few months. In a comment that raised the hackles of opposition parties, Stournaras said the loan agreement, or memorandum, could not be blamed for Greece’s problems. “I have heard people argue that the memorandum is to blame for the crisis,” he said. “This is wrong and does not serve the truth. The memorandum is the consequence of the crisis in Greece.” Stournaras said that Greece would ask for more time to meet its fiscal targets. The fiscal adjustment period is due to end in 2014 but Athens may ask for two more years, which could mean its lenders having to provide up to 20 billion euros more in loans. “Extending the adjustment period means someone will have to give us more money,” said Stournaras.

“This means we will have to negotiate. “You cannot renegotiate [the memorandum] if you have not first taken measures to get the fiscal adjustment program back on track.” Stournaras said that fiscal adjustment was one of the four elements to the strategy that would lead Greece to recovery. The other three were boosting productivity, creating a modern welfare state and removing obstacles to growth. The finance minister, who is due to take part in his first Eurogroup meeting with eurozone finance ministers Monday, also placed great emphasis on the importance of privatizations to Greece’s progress.

“The privatization program aims at attracting significant international capital that will be invested mainly in property development and infrastructure,” he said. Stournaras identified 28 privatizations, including the state natural gas, water and betting companies, as well as regional airports and ports. He said that the sale of the Public Power Corporation and the Hellenic Railways Organization would come at a later stage. The Finance Ministry announced Sunday that it had completed the sale of four Airbus A340-300s that had belonged to Olympic Airlines to four companies that agreed to pay a total of almost $135 million (110 million euros) for the airplanes.  

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