ECONOMY

Who is raising obstacles to sell-offs and why

Although Greece has been discussing its privatization program for almost three years, precious little has materialized to date. In essence, the sell-off program is yet to start, given that the projects that have been completed were either necessary for the investors, as in the case of Deutsche Telekom, cell phone networks and the International Broadcasting Center, or concerned internal transfer of properties, such as OPAP’s exclusive rights.

The first real privatization, if it is implemented, will be that of gaming company OPAP, which is expected to be completed within the first half of the year. It will bring foreign funds into the country while a series of state assets will be passed over into the hands of private investors.

There are several factors that have been hampering this process. This is not just about the usual political reaction by parties or unionists and employees, who are by definition against any changes to their working status in state companies and corporations; this not about the traditional “national” procurers either – those who will need to find new means of doing business. The greatest reaction comes from the “rival business,” the type of entrepreneurship that despite having no dealings with the public sector finds it convenient to exist next to a lazy and slow state engine.

A case in point is the companies offering Internet betting, which have been doing brisk business for years without any licenses or having to pay a single euro in taxes. They are strongly against the privatization of OPAP as they know very well that a private manager at the helm of the betting corporation would not be indifferent to the company’s interests, as has happened time and again with appointed managers at state-run OPAP.

Another factor hampering sell-offs, which is possibly even more important, is that no one among the political elite, including the country’s governments, has really taken to privatizations. Given that they reduce the field of ministries’ control, government members were never excited about cooperating with the state privatization fund (TAIPED).

Delays in the submission of documents for the properties to be privatized suffice to show the extent of departmental reluctance. It took TAIPED months to get the title deeds of the former royal estate at Tatoi in northern Attica, which were in the possession of the Agricultural Development Ministry’s Agrogi corporation.

Furthermore, a number of authorized civil servants, with the blessing of their superiors (i.e. general secretaries, deputy ministers etc), took weeks or even months to respond to simple questions from the fund that were crucial for the promotion of the sell-off program.

Reactions to and delays in the program are not always deliberate. The lack of know-how in the mass privatization of state assets has become obvious and has often generated discontent and embarrassment. Not only did the state lack the appropriate human resources to promote the program, but it was often unaware of the work that had to be done.

For instance, the creation of an operation framework for the market even in the case of a monopoly, as in the Public Gas Corporation (DEPA) and gas transmission network operator (DESFA) required the mobilization of an army of experts, mostly from the European Union, in order to avoid the possibility of replacing a state monopoly with a private one.

It took dozens of legislative interventions and it is doubtful there may be any more than two or three people in Greece who could have handled them.