Fin Min:Greece To Complete First Privatizations By Summer
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By Costas Paris and Alkman Granitsas
Of DOW JONES NEWSWIRES
ATHENS (Dow Jones)--Greece hopes to raise its first revenue from its ambitious EUR50 billion privatization program by this summer, Finance Minister George Papaconstantinou said Tuesday, and will announce the appointment of its first advisors as early as Wednesday.
"We may have the first income from privatizations in the summer," Papaconstantinou said, adding that the first phase of the program calls for EUR15 billion from privatizations in the next three years.
Speaking to journalists, Papaconstantinou said that the Greek government's interministerial committee on privatizations will meet tomorrow.
He said that by the last quarter of the year, Greece will have appointed all of its outside advisors for its privatization program.
Since May of last year, Greece has been struggling to close a yawning budget gap after narrowly avoiding default with the help of a EUR110 billion bailout from the European Union and International Monetary Fund.
However, worries about the country's ability to repay its massive public debt--equal to about EUR340 billion and close to one and-a-half times annual gross domestic product--have made investors reluctant to lend to Greece.
To pay down some of that debt, Greece earlier this year disclosed a plan to raise some EUR50 billion from the privatization of public assets by 2015.
Among the first moves to be considered by the government's privatization committee Wednesday, are steps to privatize the national lottery; extend the privately-managed concession for the Athens International Airport; and sell-off the government's stake in Greece's natural gas monopoly DEPA.
Over the next three years, the government is also aiming to privatize a range of assets from the national railroad company, to regional airports and water companies, as well as better exploiting its vast land holdings--which has an estimated value of close to EUR300 billion.
In his remarks, Papaconstantinou also reaffirmed Greece's plan to come up with a medium-term strategy to further narrow the deficit over and above the measures already implemented in the last year.
Under the terms of the deal signed with the EU and IMF, Greece must come up with a mixture of about EUR20 billion in spending cuts and tax increases for the period 2012-15, and which are expected to include deep cuts in entitlements.
Those additional measures must be ready by April 15, Papaconstantinou said, shortly before the next quarterly appraisal by EU and IMF officials.
Despite progress in cutting the deficit--from a record 15.4% of GDP in 2009 to 9.4% last year--Greece's efforts to narrow the budget gap have been bedeviled by flagging tax collections that have consistently failed to meet budget targets.
Earlier Tuesday, the Kathimerini newspaper reported that preliminary budget figures for the first half of March show revenue collections were 18% below prior year levels, following weak revenue collections in the first two months of the year.
"There is a shortfall in revenue, but it's not a problem that can't be dealt with," Papaconstantinou said.
