ECONOMY

Privatization plan finally passed

Greece approved on Monday the first wave of privatizations aimed at helping making its debt sustainable by deciding to ?immediately proceed? with the sale of stakes in several state-controlled companies, including OTE telecom and Hellenic Postbank (TT).

A statement issued by the Finance Ministry said the Cabinet agreed on the plan which aims to raise 50 billion euros by 2015 by also reducing holdings in Piraeus and Thessaloniki ports as well as the Thessaloniki water company (EYATH) ?in order to front-load its ambitious program.?

?To accelerate this process, the creation of a sovereign wealth fund composed of privatization and real estate assets was also decided upon,? the ministry added.

Greece plans to sell a 10 percent stake in OTE to Deutsche Telekom and will consider selling an additional 6 percent of the phone company. A 17 percent stake in power company PPC will also go under the hammer either through the stock market or by spinning off PPC assets to a strategic investor.

Additionally, a 34 percent stake in TT will be put up for sale with an additional 10 percent in the lender possibly being listed on the Athens bourse or going to a strategic investor.

Greece has been under increasing pressure from financial markets and its creditors, the European Commission and the International Monetary Fund, to pick up the pace of the sell-off program as a condition to receiving the fifth tranche of EU-IMF aid worth 12 billion euros.

After last week?s Eurogroup meeting in Brussels, several EU leaders made it clear that any possibility of Greece being provided with additional aid to the 110-billion-euro agreement signed last year will require faster execution of the sell-off program.

Meanwhile, data from the Finance Ministry released on Monday showed that the general government deficit in the first four months of the year was slightly larger than expected as revenues dipped under the weight of the recession.

The general government deficit, which does not include budget data from local councils and state enterprises, reached 7.2 billion euros, versus an expected 6.9 billion euros.

Revenues in the January-April period dipped 9.1 percent year-on-year to 14.4 billion euros, some 1.2 billion short of the target, due to a deeper-than-expected recession in the last quarter of 2010 and last year?s one-off revenue boost to road tax which was not repeated.

For the period, ordinary budget expenditures were up 3.6 percent at 21.02 billion euros, compared with a four-month target of 20.84 billion.