Europe
3:12 am
Sat September 1, 2012

For Sale: Greek Government Assets — Slightly Used

Originally published on Sat September 1, 2012 12:31 pm

Greece is trying to raise cash by reviving an ambitious program to privatize state assets. The country's lenders, which include the European Union and the International Monetary Fund, hope the sell-off will cut the country's enormous debt.

But Antonis Tsifis, who runs a betting shop in a working-class neighborhood in Athens, is upset that the government is going to sell its stake in OPAP, the giant gaming firm that oversees his betting shop.

"If [the government] wants to sell the most profitable company it has, at a time like this, then what can I say?" he says. "There will be nothing left to sell after that."

The government needs the cash, but critics like Tsifis expect the privatization drive to be a fire sale. The country's lenders say Greece must raise the equivalent of $23 billion through privatization by the end of 2015.

Besides OPAP, other assets for sale include stakes in the electricity company and the site of the former Athens airport. The government also said it would sell its majority share in Hellenic Postbank, a small lender that took major hits after investing heavily in now-devalued Greek government bonds. The bank workers are striking to protest the move.

Constantinos Michalos, who leads the Athens Chamber of Commerce, says privatization will save Greece from bankruptcy.

"If we don't look at growth prospects, if we don't look at stimulating the economy, which only come by this privatization scheme, then I think we're just sitting idle and waiting for the inevitable to happen in the coming months," Michalos says.

But critics of privatization say the country's dire straits will attract vultures — investors who swoop into vulnerable economies and buy prime property at rock-bottom prices.

George Papaconstantinou, the finance minister in the previous Socialist government, says transparency can weed out those vultures.

"Any kind of shadow on the openness and transparency in the process invites accusations that you're selling out to a vulture," he says. "But if you put something out and you invite different bids, then you see what the real interest is. Yes, the danger is there, but the state has the power to monitor."

Papaconstantinou says a privatization done well can benefit Greeks. An example, he says, is the phone company OTE.

"Greeks now pay less for their phones," he says. "We've seen the quality increase dramatically; people would have to wait for years to get a fixed line ... it was like the Dark Ages."

The privatization of the phone company began in the early 1990s. Banker Panagis Vourloumis completed it in 2006.

"I was trying to save the company from bankruptcy," he says. "And I managed to do it."

Vourloumis says many state-owned companies still have the same problems that he saw in OTE.

"Their workers have a lot of privileges," he says. "They cannot be fired. They cannot even be transferred. They refuse to be evaluated. They usually have much higher than average salaries than in the private sector."

These are privileges many in politics want to preserve, he says.

Political resistance stalled the privatization program last year. Now, a three-party coalition government hopes parliament will approve it later this month.

It could be hard, however, to attract buyers who still worry Greece will go bankrupt and drop the euro, which would then devalue their investment.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

SCOTT SIMON, HOST:

As the economic crisis in Greece grinds down, the country's trying to raise cash by reviving a program to privatize state assets. Institutions that have lent money to Greece hope this sell-off will cut the country's enormous debt, but critics say it's just a fire sale. Joanna Kakissis reports from Athens.

JOANNA KAKISSIS, BYLINE: Antonis Tsifis rings up a soccer wager for a customer in his small betting shop. Austerity has shut down many businesses, but so far, Tsifis is beating the odds. Now, he's worried. He's heard the government is going to sell its stake in OPAP, the giant gaming firm that oversees his betting shop.

ANTONIS TSIFIS: (Through Translator) If it wants to sell the most profitable company it has, at a time like this, then what can I say? There will be nothing left to sell after that.

KAKISSIS: The government needs the cash, but Tsifis expects it to be a fire sale. The country's lenders say Greece must raise the equivalent of $23 billion through privatization by the end of 2015. Besides OPAP, other assets for sale include stakes in the electricity company and the site of the former Athens Airport.

Constantinos Michalos, who leads the Athens Chamber of Commerce, says privatization will save Greece from bankruptcy.

CONSTANTINOS MICHALOS: If we don't look at growth prospects, if we don't look at stimulating the economy, which only come by this privatization scheme, then I think we're just sitting idle and waiting for the inevitable to happen in the coming months.

KAKISSIS: But critics of privatization say the country's dire straits will attract vultures, investors who swoop into vulnerable economies and buy prime property at rock-bottom prices. George Papaconstantinou, a former finance minister, says transparency can weed out those vultures.

GEORGE PAPACONSTANTINOU: Any kind of shadow on the openness and transparency in the process invites accusations that you're selling out to a vulture. But if you put something out and you invite different bids, then you see what the real interest is.

KAKISSIS: And Papaconstantinou says privatization done well can benefit Greeks. An example, he says, is the phone company, called OTE.

PAPACONSTANTINOU: Greeks now pay less for their phones. We've seen the quality increase dramatically. People would have to wait for years to get a fixed line.

KAKISSIS: The privatization of the phone company began in the early 1990s. Banker Panagis Vourloumis completed it in 2006.

PANAGIS VOURLOUMIS: I was trying to save the company from bankruptcy, and I managed to do it.

KAKISSIS: Vourloumis says many state-owned companies still have the same problems that he saw in OTE.

VOURLOUMIS: Their workers have a lot of privileges. They cannot be fired. They cannot even be transferred. They usually have much higher, on the average, salaries than in the private sector.

KAKISSIS: And these are privileges many in politics want to preserve, he says. Political resistance stalled the privatization program last year. Now, a three-party coalition government hopes parliament will approve it later this month. It could be hard to attract buyers who still worry Greece will go bankrupt and drop the euro, which would devalue their investment.

For NPR News, I'm Joanna Kakissis in Athens. Transcript provided by NPR, Copyright National Public Radio.