Greece’s obligation to force the public corporations that are up for sale to return European Union investment subsidies constitutes a major headache for the government, considering that the privatizations program has already suffered delays.
According to EU structural fund regulations, public interest projects are subsidized by the bloc at a rate that sometimes exceeds 80 percent. However, if those projects are privatized, the funding they secured as public interest works will have to be returned.
The planned changes in the ownership of corporations such as the Athens and the Thessaloniki water companies (EYDAP and EYATH), Public Gas Corporation (DEPA), Public Power Corporation (PPC), Hellenic Railways Organization (OSE) and several pieces of infrastructure, such as ports that have been transferred to the state privatization fund (TAIPED) as part of the sell-off program, will also entail a change in their funding status. The issue is already on the negotiating table for EYATH, for which suitors have made their first bids.
Sources from the European Commission say that the practice of subsidy recovery does not contravene Brussels’s insistence on extensive privatizations in Greece.