Greek Government Contemplates Privatization of State Assets

Greek Government Contemplates Privatization of State Assets and Further Tightening Measures

May 27, 2010

Sofia Echo - Prime minister George Papandreou has insisted that austerity measures, which will also affect salaries and pensions, are unavoidable if the Greek economy is to survive its current debt crisis. Papandreou also said that privatizations of certain state assets were in the pipeline, Greek daily Kathimerini reported on May 27 2010.

His statement will do little to defuse the tension in the country as Greeks are angered by spending cuts and tax and pension-age rises planned in return for a 110 billion euro emergency bail-out -- a measure designed to curtail debt and spending -- and fresh budget cuts of 30 billion euro over three years.

Greece's current public deficit, which is worse than the 12.7 per cent initially thought, and stands at 13.6 per cent, is supposed to be reduced to three per cent in three years.

"Cheap labour and reduced pensions are unavoidable measures during the current crisis," Papandreou said during an address to cabinet ministers.

Regarding the privatisations of state assets, he said it was necessary if Greece is to boost its competitiveness internationally. Reportedly, the government is already looking to shed the Hellenic Railways Organization (OSE) and find a private investor to run the company, the Kathimerini report said.

OSE was linked earlier in May with Chinese shipping firm Cosco, which already operates the two main container terminals in the port town of Piraeus, south of Athens. The government is also mulling the sale of seized real estate as well as the relocation of government offices from rented properties to state-owned plots.

The rescue package for Athens was agreed earlier in May, as the Greek parliament approved tough new austerity measures to help curb its soaring debt and deficit as thousands of people demonstrated in Athens.

Because of the turmoil in the Balkan state, the European single currency fell to its lowest level against the dollar since 2006, amid concerns that debt problems will undermine Europe's recovery from the global economic crunch.