Greece may miss 2012 selloff target due to EU crisis

Greece may miss its target for privatization revenues next year because of the worsening economic climate in Europe, the head of the agency responsible for selling state assets said in an interview to be published on Sunday.
Greece's repeated failure to meet budget targets including for privatization revenues has angered international lenders, raising questions about whether they will continue indefinitely to keep the country afloat with bailout loans.

Costas Mitropoulos, head of the Hellenic Republic Asset Development Fund, told the Kathimerini newspaper the privatization revenue target of 9.3 billion euros ($12.3 billion) for 2012 was "achievable," based on the draft budget assumptions.

"But reality will show whether these assumptions were right. In order to be able to sell, there should be buyers," he said, noting that even Germanyfailed this week to sell all its bonds at an auction.

"If this (difficult economic) situation continues, then it is certain that it will be difficult for us to find buyers for our assets."
Greece initially agreed with its international lenders to raise five billion euros from state asset sales this year. But government delays in setting up the privatization fund and imploding market values on the Athens bourse forced the government to cut the target to 4 billion euros.

Now Greece is seen raising only about 1.8 billion euros this year.

Under the terms of last year's 110 billion euro bailout, Greece is meant to sell state assets worth 50 billion euros by 2015 to convince its lenders it is serious about reforming its uncompetitive economy and also to shoulder part of the cost.

Greece's new national unity government is now pushing a tough 2012 austerity budget through parliament, a key condition for unlocking funds from a second bailout agreed last month worth an additional 130 billion euros.

A poll published in Sunday's edition of Eleftheros Typos daily showed more than 70 percent of Greeks expect their country's economy to remain in its current doldrums or to deteriorate further under the new government.

Greece is in its fourth year of recession. The draft budget envisages the economy contracting by 2.8 percent in 2012 after shrinking more than five percent this year.


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