ECONOMY

Privatization proceeds will be used to reduce the debt

The government is reviving its stalled privatization program in order to collect enough money to lower Greece’s public debt by a large margin. As part of its obligations under the European Union’s Stability and Growth Pact, Greece has set out to reduce the country’s debt from 105.3 percent of its gross domestic product (GDP) in 2002 to 100.2 percent in 2003. A reduction by five percentage points means that the government needs about 3 billion euros in extra revenues, Economy and Finance Minister Nikos Christodoulakis has announced. The announcement, last week, of the sale of a 16.65 percent stake in Hellenic Petroleum, the biggest industrial and commercial group still in state hands, to a Latsis group company, and the resulting imminent merger of Hellenic Petroleum with Petrola Hellas, brought 326 million to state coffers and rekindled interest in the stock market. The Athens Stock Exchange yesterday rose 2.43 percent to close at 1,876.64 points, a year high. This week, the ASE has risen 9.90 percent. Perhaps more importantly, investors have returned and turnover has increased significantly. This is what the government is hoping for – a sustainable rise in the market not seen since the pre-election period in spring 2000. On Thursday, the government announced it will offer next month a further 24.61 percent stake in soccer pool and lottery company OPAP, lowering its participation to about 51 percent. This, along with the sale of a third tranche of shares in electricity utility PPC, will provide some 1.2 billion euros in revenues. Beyond those partial sales, the government hopes to complete the tender for a sale of a 30 percent stake in Public Gas Corporation (DEPA) by August. It will also complete the sale of Hellenic Exchanges to a group of Greek banks. The next moves will include the listing of Hellenic Tourist Properties (ETA) and the Piraeus Port Authority. About a quarter of ETA will be floated. The government may even push through the sale of the Postal Savings Bank, which, despite its small size, is attracting plenty of interest from commercial banks thanks to its considerable portfolio of mortgage loans. However, according to government sources, it is more likely that the government will merge the Postal Savings Bank with Attica Bank. The latter’s main shareholder, the Engineers’ Fund (TSMEDE) demands at least a 35 percent stake in the post-merger entity in order to agree to the merger. The engineers have said they are ready to buy more shares in Attica Bank, if necessary. It is also said that Transport and Communications Minister Christos Verelis is opposed to the sale of the Postal Savings Bank, but this means little: A few months ago, Development Minister Akis Tsochadzopoulos had opposed the Hellenic Petroleum – Petrola agreement. Even if the government achieves its revenue target, a sustainable revival of the stock market would be a very difficult thing to achieve. It will certainly not reach the frenzied heights of 1998-99, when the index skyrocketed to 6,355.04 points. And despite the fact that investors lost huge amounts of money in the subsequent decline, they seem to be cautiously testing the waters again. Perhaps the dream of easy gains on the bourse is not dead and buried, after all.