Greece to Miss Privatization Targets Once Again

Greece postpones the privatization of the port of Piraeus as it seeks to reduce its selloff targets.

Ferries in the port of Piraeus, Greece, December 15, 2007
Ferries in the port of Piraeus, Greece, December 15, 2007 (Flickr/Michael)

Greece pushed back the start of the privatization of the port of Piraeus this week for the third time in a month while Kathimerini reports that the country is once again trying to reduce its selloff targets in talks with creditors.

The far-left government of Prime Minister Alexis Tsipras argues that because it needs less money to recapitalize Greek banks than expected, it should also have to privatize less.

Under Greece’s most recent international bailout agreement, however, no direct link between bank recapitalizations and privatizations is made.

Missed targets

The state privatization fund announced this week it was delaying the issuance of tenders for a 51-percent stake in the Piraeus port.

The harbor is among the Greek state’s most prized possessions. Lenders from the European Union and the International Monetary Fund have urged its privatization since Greece was first bailed out in 2010.

The Wall Street Journal reports that the country is due to miss its privatization targets — once again — in 2016. It was supposed to raise €3.7 billion from asset sales. It is unlikely to manage more than €2 billion.

Greece has consistently missed its privatization targets through the years.

Tsipras, who came to power in January, is also ideologically opposed to shedding state assets.

He nevertheless agreed to another privatization attempt this summer when he accepted a third, €86 billion bailout conditioned on budget cuts and liberal economic reforms.

Another try

In 2011, Greece set up the Hellenic Republic Asset Development Fund to privatize €50 billion worth of state assets by the end of 2015.

It has managed to return just €7.7 billion to private investors so far.

Under the latest bailout, the fund is to be replaced by another, but the new agency would have the same mission.

Politico called this “the triumph of hope over experience” and pointed out that what has been sold in last four years were the least controversial items: some beach property in Rhodes, the state lottery, the football prognosis company and horse-betting outfit. (Yes, the Greek government owned all of this.)

Still to be sold are ports, railways and utilities.

Such privatizations would be contentious anywhere in Europe. In Greece, it seems impossible.

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