Politics: FinMin: Foreign investor interest in Greek privatisations, real estate development

Foreign investors have already expressed an interest in the Greek privatisation programme state property development, according to Finance Minister George Papaconstantinou.

Speaking to the ANA-MPA on the sidelines of an ECOFIN council here, Papaconstantinou clarified that investors' interest has to do with state enterprises as well as the public real estate.

Asked about the sustainability of the Greek debt, Papaconstantinou noted that "we have always believed that the Greek debt is fully sustainable. European decisions help the sustainability and also bring relief to the markets, which have expressed some doubt about whether the actual repayment schedule and the cost of servicing the debt are too high. Both the extension of the maturities and the lowering of the interest rates are in the right direction".

Regarding the high-profile 50-billion-euro programme, the Greek FinMin emphasised: "The action plan we are drafting will show the huge potential that exists out there. We have already had great interest by foreign investors, both for individual corporate entities, as well as for individual assets, in terms of public properties that would be available".

“The landscape is very different now,” following the significant decisions for Greece taken in an EU Summit last week, George Papaconstantinou told reporters. He added that both a decision to extend the repayment period of the loans and a decision to lower the interest by one percentage point, covered the total loan of 80 billion euros offered by eurozone states. He noted that the extension would transfer around 50 billion euros from two difficult years (2014 and 2015) to the future, while the lower interest would cut around 6.0 billion euros from interest payments. “Both decisions send a message of viability to international markets,” the Greek FinMin said, adding that a similar extension was examined by the International Monetary Fund for its loan facility, totalling 30 billion euros, to Greece.

Papaconstantinou said also a decision allowing the European Financial Stability Fund (EFSF) to purchase state bonds from primary markets was very significant for Greece, adding that in case that Greece asked the mechanism to buy its state bonds, it did not mean an additional memorandum. He said that Greece would need around 66 billion euros in 2012, of which 24 billion euros have been agreed with the Eurozone and the IMF. The FinMin emphasised that the country aimed to return to markets in 2012, if not as early as late 2011.

Papaconstantinou said an action plan to raise 50 billion euros from the more efficient management of state property - envisaging privatisations for the period 2011, 2012 and 2012 - will be ready by the end of March. The government will also draft a medium-term fiscal strategy programme - with a horizon of 2015 - by the end of the month, Papaconstantinou said, adding that this programme would be discussed with political parties and social partners.

He underlined that continuing a fiscal consolidation program, promoting reforms, efficiency in management of state property and a privatisation programme were preconditions for Greece to exit the crisis.

Finally, he said some details needed to be cleared out regarding wider decisions over the operation of a support mechanism in the Eurozone, although he stressed that there were pending issues regarding Greece.

“The European Union is completing a European structure by strengthening economic governance, competitiveness and debt management in the Eurozone,” the minister concluded.

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