Creditors, market react to TAIPED shift

Greece’s creditors and the market appear particularly unhappy with the announcements by Alternate Finance Minister Nadia Valavani on the change in the destination of privatization revenues.

Valavani told a parliamentary committee late on Monday that she will introduce an amendment whereby the collections of state sell-off fund TAIPED – whose name is set to change to the State Property Fund – will be used to fund social security system instead of servicing the state debt, as is the case today.

Market professionals speak of a unilateral move by the government, while some stress that the law amendment still has a long way to go before it is voted on by Parliament, saying that if an agreement is reached with the creditors the amendment may not be approved.

They add that the new regulation is not compatible with Finance Minister Yanis Varoufakis’s pledges to the Eurogroup earlier this month.

That contradiction between words and actions was also highlighted on Tuesday by former Alternate Finance Minister Christos Staikouras, currently an opposition deputy: He noted that in the negotiations in Brussels which Varoufakis took part in he had said that revenues from privatizations – even if they were lower than anticipated – would contribute to the reduction of the state debt.

The documents from the negotiations at the Eurogroup meeting distributed by Varoufakis show that among the government’s intentions is to avoid “fire sales” of state assets. However there is no mention of a suspension of the privatizations program or of an amendment to how the program’s resources will be used.

On Tuesday the new appointees took over at TAIPED, namely Stergios Pitsiorlas as the new president and Antonis Leoussis as the new managing director.

The government asked for the resignation of two more board members, Aris Kallipolitis and Costas Kefaloyiannis, while Valavani said on Monday that the board members appointed by the creditors as observers – Zenon Kontolemis and Philippe Boin – will have no place in the State Property Fund.

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