Greece selling off stakes to raise €3bn
GREECE plans to sell stakes in railway and water companies and the postal service to raise €3bn and reduce a budget deficit that sparked the debt crisis across southern Europe.
"We decided to accelerate the privatisations process," Greek Finance Minister George Papaconstantinou said in Athens yesterday. The government aims to raise €1bn a year for the next three years from the sales.
The crisis that originated in Greece prompted the region's leaders to unveil an unprecedented $750bn loan package to restore calm to markets. Greece last month took the first tranche of an emergency loan from the European Union and the International Monetary Fund.
Greece will sell 49pc of the Trainose unit of Hellenic Railways Organisation; 23pc of Thessaloniki Water & Sewage, the country's second-biggest water company; and reduce its stake in Athens Water Supply and Sewage Company. It also plans to sell 39pc of Hellenic Post Offices.
The state will also extend the concession of Athens International Airport, the country's biggest airport, which is managed by German construction company Hochtief. Companies to manage ports will be created and may hold public sales of shares. The state would retain a stake of at least 51pc in the companies.
Mr Papaconstantinou said Greece will maintain its holdings in Public Power, the country's biggest electricity producer, and Hellenic Telecommunications, the largest telephone services provider. The state has a 51pc stake in Public Power and a 20pc holding in Hellenic Telecom.
The government will set up a holding company for state assets which may include shares in Public Power and Hellenic Telecom, Mr Papaconstantinou said.
In exchange for the rescue funds last month, the Greek government is cutting wages and pensions for public workers and raising sales, fuel and alcohol taxes. The country's budget gap widened to 13.6pc of gross domestic product last year, more than four times the EU limit of 3pc of GDP. (© Bloomberg)