Seeking the road to fiscal recovery

The government is turning its attention to the utilization of the country?s infrastructure in the context of its privatizations program, as Athens?s international creditors have made it clear that Greece must not miss its planned quantity targets.

The timetable of privatizations is ?open regarding which property assets will be utilized and when,? government officials suggest. The only certainty is that by the end of September at least 1.3 billion euros from privatizations will need to have entered state coffers, with another 3.3 billion scheduled to come in the last quarter of the year.

The question is how the government will get these funds. For instance, one of the plans scheduled for the fourth quarter of 2011 could be postponed until next year, while bringing forward another originally penciled in for 2012. These changes may occur as a result of the unrest across global stock markets.

Among the ideas under consideration is bringing forward the utilization of the country?s infrastructure, such as roads, regional ports, airports etc. These assets are not listed on the Athens bourse, so their significant values have not been affected by the general losses seen on the local stock exchange, and ought to be capable of bringing in the revenues that would meet the privatization targets set.

The Finance Ministry has realized it will have to sell some state assets at a certain discount, given that the Greek economy is going through one of the worst phases in its history. The idea is to attract investment as soon as possible so that more capital will follow and gradually help the value of state assets climb to a more satisfactory level. This would allow Greece to reap capital gains from future sales.

All this will form part of negotiations with the country?s creditors, whose troika of representatives will likely arrive in Athens on August 29, with a technical team set to arrive one week earlier. Any decisions regarding privatizations will only be made once they have been consulted, too.

The troika is also set to voice its concern about the course of the recession, which first-half data make unlikely to close at just 3.5 percent this year, as the original target was.