Thursday 29 September 2016

Greece to sell its airports to German firm in €1.2bn deal

Mehreen Khan

Published 19/08/2015 | 02:30

German Chancellor Angela Merkel greets colleagues as she arrives for a meeting of the parliamentarian group of the Christian Democratic Union (CDU) party at the parliament in Berlin. Photo: AFP/Getty Images
German Chancellor Angela Merkel greets colleagues as she arrives for a meeting of the parliamentarian group of the Christian Democratic Union (CDU) party at the parliament in Berlin. Photo: AFP/Getty Images

The Greek government has rowed back on promises to halt the fire sales of the country's strategic assets by approving the sale of its airports to a German company.

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Operating rights to 14 regional airports, including those on popular holiday destinations such as Crete, will now fall under the control of Fraport AG, the operator of Frankfurt airport.

The €1.23bn deal represents a significant climbdown for Alexis Tsipras, who had denounced attempts by the troika to force various Greek governments to de-nationalise the country's ports, electricity networks and airports.

But the embattled Greek prime minister has been forced into a number of concessions in return for an €86bn aid package to keep the country in the euro for the next three years.

The deal comes as Germany's Bundestag prepares to vote on the package later today.

Bidding for the airports was won by the German firm in November but the process was suspended by Mr Tsipras's Syriza party when it came to power in January amid claims the tender broke competition rules.

Fraport will operate the airports for the next 40 years under the licence agreement.

Former finance minister Yanis Varoufakis has attacked the programme for entrenching the country's oligarchic elites and hurting the government's coffers through under-priced sales.

In a line-by-line critique of the demands, he dubbed the privatisations as "a major disaster in every conceivable way - from the prices fetched to the rate at which the privatisations that occurred were overturned by the European competition commission and the Greek Council of State".

The sale comes as a host of eurozone parliaments are preparing to ratify the terms of the new rescue package - Greece's third bail-out in five years.

Germany's Angela Merkel is battling to fight down a rebellion in her ruling Christian Democrat party. As the eurozone's largest creditor state, Germany holds a blocking minority vote on European Stability Mechanism loans.

Although the package is likely to gain the necessary votes, more than 60 of Ms Merkel's parliamentarians voted to reject new bailout talks in July. The rebellion is set to escalate to around 100 out of her 311 MPs.

Sceptical

The Chancellor has sought to convince sceptical lawmakers that Greece will be able to carry out the raft of reforms in return for a first disbursement of €26bn due to be made by Thursday.

Disquiet in Berlin has also grown over the position of the International Monetary Fund, which is likely to release its own funds to Greece only in October.

The Christian Democrats (CDU) and their Bavarian CSU allies are divided over the €86bn bailout.

Some MPs suspect that part of the Greek debt will be written off - a "haircut", which could hit EU taxpayers.

They also want an assurance that the IMF will contribute to the bailout.

But a majority is still expected to pass the Greek bailout, as the Social Democrats (SPD) and Greens want it to go ahead.

Finance Minister Wolfgang Schaeuble has described an International Monetary Fund role in the bailout as "indispensable".

But the IMF is avoiding any commitment to it until October, when Greece's progress in fulfilling tough reforms will be assessed.

Irish Independent

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