ECONOMY

Privatizations program has failed as banks have not yet been sold

Privatizations program has failed as banks have not yet been sold

Greece’s privatization program has failed to the tune of 94 percent, the International Monetary Fund claims in its recent report on Greek debt sustainability. It explains that state revenues from sell-offs up to March 2015 had amounted to 3.2 billion euros against an original target for 50 billion, set in 2011 during the fourth progress review of the first bailout agreement for the 2011-15 period.


Three years later, during the second bailout agreement’s fifth review, the target was revised to 23 billion euros, with completion stretched to 2022. However, even that plan has failed and the anticipated revenues are not seen as feasible anymore. The Fund goes on to put the blame on the privatization of banks for the failure of the program. Half of the takings by 2022 would have come by way of the sale of the state-controlled lenders.

The IMF report states that the new target will have to be for the collection of 5 billion euros by 2018, with an average collection target of 500 million euros per annum, according to the Fund’s experts, given the great difficulty in the privatization of state assets. The report stresses that the sell-offs will have to continue, mainly focusing on the optimum management of the state properties and boosting the investment climate in Greece.

The failure to implement the privatizations program has created additional financing needs for the country totaling 9 billion euros for the period up to 2018. 

More importantly, privatization projects are now seen to be less attractive than before. Also, the report was completed before the country defaulted on its IMF payment on June 30, and the climate in the market will have deteriorated further since then.

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