Be careful with the nation’s assets

Far-reaching privatizations of state-owned organizations along with the sale of public assets are being hailed as necessary measures to help Greece get out of the black hole of debt. The country is auctioning off significant assets, some of which, in fact, have not been put to use, but which are nonetheless viable. It is thought that allowing their use, by leasing or selling them, will help to boost development and growth. After all, this is the only reason to go ahead with such a move: Any inflow of capital coupled with a boost in employment would help to nurture the intertwined cycles of employment and growth and it can all be done fast, in two or three years, rather than having to wait a decade to see results. There are, however, certain conditions under which this strategy must work. First of all, the price has to be right and the process must carried out in a transparent manner. Naturally, no sane seller would attempt to make evaluations at current stock market prices. With the Athens Exchange having sunk to below 1,500 points, listed public companies would be scooped up for nothing. The Athens water utility (EYDAP), for example, is valued at 594 million euros at present stock market prices, while its fixed capital (facilities, plants etc) is worth 993 million euros. The second condition is that the criteria for privatizations and sales not be determined under the pressure of the prevailing anxiety to bring in cash fast, but according to long-term development goals and strategies. The concession of works of infrastructure will be for the long term and will also have an impact on people’s lives for many years to come. Caution is therefore necessary. Meanwhile, not all the state’s assets are equally ready for sale, and this is another issue that needs to be taken into consideration. Will the conditions be met? No one knows. But they must, because if the privatizations do not lead to a certain amount of growth, Greece will face a national disaster, a major loss of sovereignty and ownership that will be irreversible. Because in order to service its debt the state will not just have sold off its silver, but its land, water and tools, things without which there is no growth, or life for that matter.