Sales of stakes to raise 1.6 bln for state coffers

Shares in banks to spearhead privatization

In a bid to build on the success of last year's privatization program, the government yesterday unveiled plans to raise about 1.6 billion euros from the sale of state-owned assets in 2006.

The majority of those revenues will come from a reduction in the stakes of Emporiki Bank, ATEbank and Postal Savings Bank, which is headed for a listing on the Athens bourse.

The Public Gas Corporation (DEPA) will see its shares traded on the Athens stock market while assets belonging to Hellenic Tourism Properties (ETA), such as the Corfu casino, will be handed over to private investors.

«In the privatizations of 2006, the emphasis is on banks,» said Economy and Finance Minister Giorgos Alogokoufis after a Cabinet meeting on privatizations, which have caused unrest among unionists.

«There has been a big attempt aimed at reforming state banks in 2005. Both Emporiki and ATEbank have been reformed to a large extent,» he added.

The government has drawn growing interest from investors in Greece and abroad by proceeding with changes to state-controlled companies.

Improved sentiment on the Athens bourse and capital markets around the world may also help the government sell its assets.

However, higher share prices may deter potential buyers.

The Finance Ministry argues that it is proceeding with decisive steps in its privatization plan that will help restructure the economy and spur growth.

«We are abandoning the logic of simply maximizing revenues,» the ministry said.

Privatization revenues between 2004-2005 reached 3 billion euros, about 1.6 percent of the total amount Greece's economy produces every year.

Money from the sales is intended to help Greece reduce its massive public debt, now the largest in the European Union. The sales also mean the government will reduce its role in the aforementioned enterprises, a move which pleases investors.