Part of new privatization fund’s revenues will go toward growth


TAIPED will be the basis for the new guarantee fund for state asset privatizations as agreed on Monday at the eurozone summit meeting in Brussels. The aim is to beef up the existing sell-off fund with assets that will generate revenues of 50 billion euros in the long term (estimated at between 30 and 35 years).

Neither the government nor TAIPED appeared prepared for such a development. Some talks had taken place over the last few days regarding what assets could be included in the portfolio of the new fund. Besides those already known (the state’s shares in OTE telecom, public real estate), the discussions also included energy reserves, state holdings in systemic banks, other bank assets and properties belonging to social security funds.

All this will lead to the creation of a “hyperfund” that will undertake TAIPED’s role, as well as the activities of the Hellenic Financial Stability Fund (HFSF), the Environment and Energy Ministry as far as energy reserves are concerned, and the property assets of the pension funds.

This generates genuine hope that the long-term 50-billion-euro target can be achieved. The eurozone summit’s decision provides for 50 percent of that to cover the loans for the recapitalization of the banking sector, 25 percent will be used to service the public debt, and the remaining 25 percent will go toward the country’s growth, upon the insistence of Prime Minister Alexis Tsipras.

The new TAIPED will be institutionally upgraded so that it will be shielded from any political or governmental interference. While this had been the original plan for TAIPED, in practice all of its decisions were made by the government. Another objective is for the new fund to be monitored by the representatives of the country’s creditors, but it is not known how that will be conducted. A new governing board will also be appointed or voted in to run the new fund. The idea is for the political affiliations of board members to be more varied than is the case today.

While the parliamentary voting on the TAIPED upgrade is not among the prior actions required this week, it is certain that it will go through the House sooner or later this summer, and definitely before the signing of the third bailout agreement.