07.13.12 8:45 AM ET
Despite Dissent, Greece to Sell Public Assets
Imagine this for sale sign: Classical Greek temple overlooking Athens, roughly 23,000 square feet. Real fixer-upper. Excellent location with great historical past.
It may seem unthinkable that the Parthenon, the ancient Greek temple on the Athenian Acropolis, would ever be put on the auction block, but with Greece’s economy in shambles and the country looking to sell off public properties, who knows?
The strategy, which the newly elected Greek government announced on July 1, also calls for offering up natural gas companies, water treatment plants and even the state-run-lottery and casinos. The contract for the development of the Athens airport will go to the highest bidder. So will the country’s marinas and rail lines. The goal: to stop Greece’s financial death spiral and stay good on the country’s bailout promises to the European Union and the International Monetary Fund. The hope is to raise €10 billion in 2012 and dig deeper in 2013 if necessary, even if it means resorting to privatizing some of the country’s biggest tourism draws, including monuments and museums.
“The privatization program aims at attracting important international capital that will be invested mainly in property development and infrastructure,” said Greece’s new finance minister Yanins Stournaras as he addressed Parliament before winning a key vote of confidence on the subject last weekend.
Yet many Greeks are not so keen of the idea that private companies, some of which are foreign owned, may soon control many of the country’s public assets. Most at odds with the program: Alexis Tsipras, the opposition leader of the radical left Syriza party, who promises to fight the initiative to its death. Tsipras warned the Greek parliament that there would be opportunists looking to “snatch state property for cheap” and he threatened that any private investors who paid for public entities could lose their investments and be held liable in criminal court if the current government falls and he sweeps into power.
He faults the new center-right government under Antonis Samaras for not holding true to their campaign promise to plead with the European Union in Brussels to renegotiate the terms of their massive bailout and calls the privatization plan nothing short of selling out.
Tsipras campaigned last May and again in June on an anti-bailout platform that could have cost Greece its membership in the euro zone. Voters instead narrowly selected Samaras, who vowed to stick with Europe, but pledged that he would march to Brussels and demand a renegotiation of the strict bailout terms that are choking the economy and sending more Greeks below the poverty line. Since taking office, Samaras has not had much success keeping his promise. Instead he’s backed down, reiterating to Brussels that Greece would respect the bailout without even requesting an extension on some of the strictest terms.
“The renegotiation of the bailout ended on Sunday, June 17,” Tspiras told parliament last week, referring to the day Samaras beat him in a close election battle. “He promised a program that has already missed its targets. Doesn’t the derailment of the revised bailout plan prove its failure?”
Greece’s powerful labor unions have joined Syrzia in opposing the move towards privatization, and that could mark the program’s death knell. Threats of widespread strikes and protests are keeping the Samaras government on its toes, ever-aware that news reports of tear gas and violence in the streets could make things far worse for the already beleaguered Greek government. The union that represents the country’s energy provider has even threatened to turn off the country’s power supply in protest if any state entities are auctioned off. And since taking office in late June, the Samaras government has lost three major ministers. Some, like labor minister Nikos Nikolopoulos, resigned because he says Samaras wasn’t honest with his intentions to renegotiate with Brussels.
Still, Samaras seems dedicated to the privatization plan as Greece’s last chance for economic survival-and he may be right, even if the price, according to Tspiras, is not worth it. Recent projections forecast that Greece’s economy will plummet even further, with GDP set to decline by 6.9 percent in 2012. Meanwhile, Greece has only 18 months to cut €11.5 billion from its state spending budget or risk losing its next bailout check. The constant drumbeat of doom in Greece may convince even the greatest naysayers that selling out is the only option.