Brussels sets obstacles to sell-offs

Bureaucracy in Brussels and insufficient management in Athens are leading to serious delays in the privatizations program as well as the completion of already agreed transactions.

It emerged on Friday that the transfer of the Natural Gas Transmission Network Operator (DESFA) to Azeri company Socar, from which the state and Hellenic Petroleum expect to receive 400 million euros, will be delayed due to the pending inspection of Socar by the European authorities. The European Commission needs to establish whether the Azeri company will adhere to the European directive for the separation of the transmission and production of natural gas or electricity.

The inspection has not started yet as Commission sources argue that the Greek side has not yet completed the necessary procedures. In a meeting with Greek officials on Thursday, the Commission noted that Greece’s Regulatory Authority for Energy has not yet submitted to Socar the necessary demand for the certification of DESFA based on the change in its stakeholders. Brussels also said that the deal must be preceded by an intergovernmental agreement between the EU and Azerbaijan.

Another case of poor cooperation between Brussels and Athens is the failed effort to privatize the Public Gas Corporation (DEPA). Although Greece blamed the failure on obstacles raised by the Commission to Gazprom’s entry into the Greek market, some part of the blame certainly lies with the government for its poor planning and inefficient negotiations with the candidate buyer.

In other cases the Commission has taken a long time before issuing its approval, particularly where state subsidies are involved. While Brussels, as one of Greece’s creditors, has on the one hand been putting pressure on Athens to sell state assets since 2010, on the other it was only this year that it started allowing public companies to rid themselves of any subsidies that may have been burdening them.

Railway service operator Trainose, for example, only received the green light from Brussels in June for its sale tender to start.

In the case of Piraeus Port Authority (OLP), the approval arrived in May and the issue remains open as the there is concern on the part of the Commission regarding the deal signed between OLP and Chinese company Cosco.

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