Greece to sell stakes in state-owned groups

Financial Times
May 24, 2011

The Greek government announced on Monday that it would sell stakes in state-controlled companies and form a sovereign wealth fund, to stem criticism that it has dragged its feet on measures to raise revenue and cut spending.

The cabinet had “reaffirmed its determination to continue with the fiscal consolidation programme”, finance minister George Papaconstantinou said in a statement, with measures amounting to more than €6bn ($8bn) – or 2.8 per cent of gross domestic product – intended to bring down the budget deficit from 10.5 per cent of GDP to 7.5 per cent by the year’s end.

He said detailed measures to cut further the deficit to 1 per cent of GDP by 2015 would be announced when the official “troika” from the European Commission, European Central Bank and the International Monetary Fund completed their review of Greece’s economic policy, expected next week.

Government would immediately proceed with sale of stakes in OTE Telekom, Postbank, the ports of Athens and Thessaloniki, and the Thessaloniki water company “to frontload its ambitious privatisation programme”, Mr Papaconstantinou said. The government gave no indication of the price it expected for these assets, and no firm time­table for the sales.

A sovereign wealth fund composed of privatisation and real estate assets would speed the process, he added.

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