Christodoulakis defends use of privatization funds

The government yesterday defended anew its controversial use of funds raised through its privatization program, this time adding a social policy coloring. «We shall never leave those insured without the pensions they are entitled to and we shall use every means to achieve this,» Economy and Finance Minister Nikos Christodoulakis told a news briefing. On October 15, the ministry dismissed opposition deputies’ claims that privatization funds were being used to lower the budget deficit or to fund social policies. «Such sums are exclusively used to lower the public debt… according to Eurostat rules, it is forbidden to use revenue from the sale of shares in public companies to reduce the budget deficit,» it said in a statement. In another one a week later, however, the ministry did acknowledge that such money «is not solely used to reduce the public debt.» “The public portfolio company (DEKA) occasionally meets other expenses, such as those of social insurance funds directly or indirectly related to privatizations… all expenses are registered and fully legal, there is not the slightest opaqueness or concealment of expenses,» Christodoulakis said yesterday. The minister said the government has raised 2.6 billion from privatizations this year, after the third public offering of the Public Power Corporation (PPC) for which subscriptions closed yesterday. Total privatization proceeds are expected to overshoot the target of 3 billion euros by the end of the year. The next steps will be a tender for a strategic investor for the Athens Water Company (EYDAP) and the part-privatization of an offshoot of the Public Real Estate Company and of Hellenic Tourism Properties (ETA). Christodoulakis did not offer a timetable for the part-privatization of the Postal Savings Bank (TT), of which he said that its share capital will be reduced by 500 million euros (to the benefit of the shareholder) while a 35-40 percent stake will be offered through an open tender to international investors and social insurance funds. In an apparent attempt to assuage reactions from staff unions, he said TT would retain its autonomy for five years and jobs would be guaranteed. Commenting on the TT plan, main opposition New Democracy party economic affairs spokesman Giorgos Alogoskoufis said the government «is depriving socially useful organizations of their property in order to fill the gaping holes of the budget.» PPC’s 15.7 percent public offering was oversubscribed 3.5 times, with strong interest from international institutional investors. The government expects to raise 600 million euros.