'Meddlers’ upset Greek sell-offs

Austerity measures have provoked demonstrations in Athens. Photo: REUTERS/Yiorgos Karahalis

By Colin Freeman – 7:00AM BST 26 Aug 2012

Greece’s attempts to balance its books by selling off its bloated state sector are in disarray because of political meddling, the country’s former privatisation chief has warned.

Costas Mitropoulos, who resigned last month from the Hellenic Republic Asset Development Fund, told The Sunday Telegraph that a lack of “political visibility” around the privatisation programme meant there was little prospect of investors committing at present.

As chief executive of the fund, Mr Mitropoulos, 57, a former executive chairman of Eurobank EFG Equities and member of the global advisory council of the London Business School, was tasked with raising up to €50bn (£39.6bn) through sell-offs of state assets, from airports to casinos and power companies. So far, however, only around €1.5bn has been raised since 2010, far short even of revised final targets of €19bn.

Mr Mitropoulos said that the fund’s work had been badly delayed by the two elections earlier in the year, during which politicians sitting on the fund’s board had vetoed any further sell-offs for fear of losing votes to the radical Left and other parties against the measures.

“Between the two elections, my board voted to stop making decisions about privatisations until we had a new government,” he said. “That was a politically inspired decision, and contrary to the spirit of the programme, which was to have privatisation unencumbered by the political process. Privatisation is contentious in Greece, and they felt that by having privatisations announced every week, it would upset the electorate and cause [voters] to side with the opposition.”

The move, which led to a number of “rowdy” board meetings, meant the programme had effectively been on hold from mid-April, causing uncertainty among would-be investors. Complicating matters further had been a running commentary on privatisation by various ministers, confusing investors as to who was in charge.

“The assets belong to the fund, but ministers were speaking out of turn about the detail of the privatisation, which appeared to be changing the criteria, and that created confusion among investors and really took the steam out of the interest,” said Mr Mitropoulos.

He insisted that the assets represented potentially worthwhile deals. Most were land and infrastructure portfolios such as ports, airports and motorways.


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