As economy rebounds, Greece will wrap up bank sales this year, finance minister says
Greece will this year complete the sale of its outstanding stakes in five banks bailed out during last decade’s debt crisis and raise record revenues from state asset sales, its finance minister told Reuters.
The news is a further sign of Greece’s economic rebound following the 2010-18 crisis in which the economy shrank by a quarter, unemployment soared, street protests raged and the country nearly fell out of the eurozone.
After years of relative stability, investors have come back. The state recently sold its stake in three major banks, raising more than 2 billion euros. The latest sale, of a 27% stake in Piraeus Bank, was oversubscribed eight times.
“We had very significant interest expressed by many investors and that’s why we are aiming at finishing this process by the end of this year,” Finance Minister Kostis Hatzidakis said in an interview.
Under an agreement with creditors, Greece has until the end of 2025 to complete the sales but decided to move faster. Its remaining 18.4% participation in National Bank, the country’s largest lender, and 72% in the smaller Attica Bank will be sold this year, he said.
“We found that there was no reason to delay, to drag our feet.”
RECORD SALES
Greece last year regained investment grade status after 13 years in the “junk” category caused by its overwhelming debt load, and started the process of divesting from the bailed-out banks.
It remains the eurozone’s most indebted nation, but Prime Minister Kyriakos Mitsotakis’ center-right government, which won a second term last year, has overseen a period of recovery.
The government expects to raise 7.1 billion euros from 10 privatizations that have been concluded or will be taking place in the last 8 months, a record sum that Hatzidakis says will cover its 2024 budget target of 5.7 billion euros.
The government last month sold 30% of Athens International Airport in an initial public offering for 790 million euros. This year it expects to raise about 4.6 billion euros from concession deals for two toll roads and plans to sell stakes in ports and marinas on the island of Crete and in central Greece.
“We are determined to continue more or less the same way, pressing ahead with all necessary structural reforms just to transmit the message that this country has become a business-friendly country,” Hatzidakis said.
Greece’s economy expanded by 2% last year, slightly lower than the Finance Ministry’s projection but still way above the eurozone’s average of 0.4%.
It expects growth of 2.9% this year, buoyed by tourism, increased investments and domestic demand.
As investors flock in, Greece will raise the investment threshold for golden visas to foreigners who invest in real estate in major cities and popular islands to 800,000 euros from 500,000 euros, Hatzidakis said.
“An amendment (on the issue) will be tabled to the parliament probably this week,” he said.
[Reuters]
