Greece to Privatise Public Organisations

25/04/2005

As it seeks to raise revenue, the Greek government is planning to sell its stake in many organisations, with an emphasis on the transport and gambling industries.

By Vassilis Vassiliou for Southeast European Times in Athens – 25/04/05

More than five groups have submitted bids to buy Olympic Airlines, which has been struggling financially for years. [OA]

Facing serious budgetary problems, the Greek government is looking for new ways to boost revenues, including through privatisation of state-owned concerns. Earlier this month, the Interministerial Committee for Privatisation decided to speed up the process of denationalisation for six public organisations.

Economy and Finance Minister George Alogoskoufis, Development Minister Dimitris Sioufas and Employment and Social Service Minister Panos Panagiotopoulos have outlined the priorities of the project, which is scheduled to be completed by the end of 2005. First on the list is Olympic Airlines, which is expected to be sold in the next month. The national carrier has been in dire financial straits for many years, and the last attempt to sell it proved fruitless. However, this time more than five groups have submitted bids, and the airline could soon be changing hands.

The Post Savings Bank will come up for public offering on the Athens Stock Market by October. The government is also considering the sale of 25 per cent of the Athens International Airport. The airport was voted best in Europe and second best in the world in a survey conducted by the International Air Transport Association in 2003. The most likely buyer is Hochtief, the German company that participated in the consortium that built the airport. Negotiations are scheduled for autumn.

In addition, the committee is considering the sale of a stake in the Organisation of the Port of Piraeus. Piraeus is the busiest port in Europe for liner shipping, with 101 million passengers yearly, and will upgrade its loading mechanisms to increase its capacity for commercial shipping. Many shipping companies have expressed an interest in co-owning and co-managing the port.

However, the most dynamic changes are likely to be in the gambling industry, which is heavily regulated in Greece. Authorities are proposing to sell a further 15 per cent stake in the gaming company OPAP. That would leave the state with a less than 50 per cent share, but it is expected to preserve its majority vote on the organisation's managing board. Greece currently does not allow private gambling companies, aside from licensed casinos, but EU law says member states should deregulate the industry.

In the meantime, the government is likely to move forward to fully privatise the largest casino in the country -- Mont Parnes, north of Athens. It is also expected to make slot machines legal again, after a five-year ban stemming from a lack of supervision by authorities. Finally, the government has decided to sell the whole of ODIE, the organisation for horseracing.

Analysts say the privatisation of these state-owned organisations could have a positive effect on the Greek economy, bringing the country closer to EU benchmarks.