Eurozone officials are considering a big overhaul of Greece's sputtering privatisation programme that would move most of the state-owned real estate intended for sale into a Luxembourg-based holding company managed by foreign experts.
The plan – contained in a report submitted by the European Stability Mechanism (ESM) – is aimed at cutting through the bureaucracy that has hampered Athens' privatisation agency, the Hellenic Republic Assets Development Fund, which has struggled to meet its targets.
Under the plan, the new holding company would be empowered to manage the real estate portfolio independently from Greek government interference, including raising cash against the portfolio’s value either to pay down government debt or improve some of the lots, many of which are now unattractive to private buyers. The Greek government would still retain control of the real estate, however, and it would be up to Athens ultimately to decide when to sell.
The ESM was commissioned to submit the report by eurozone finance ministries earlier this year as the troika of bailout lenders – the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission – were forced again to cut the privatisations' projected revenues.
The prospect of handing over the assets to a foreign-based holding company has already raised hackles in Athens, however. Far-left Syriza, the main opposition party, called the plan "a blow to national sovereignty and dignity". Privatisations are the only way Athens can cut its own debt burden in a large-scale way; without a quick improvement in the programme, many troika officials, particularly at the IMF, believe Greece can only be returned to sustainable debt levels if EU bailout lenders accept losses on their existing loans to Athens.
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