The utilization of Greek public property has become one of the leading topics in public life, especially after the country has fallen into a very serious economic situation. A year ago, the PASOK government set up a fund for utilization of public property, which has not delivered impressive results at least not yet. Traditionally, any attempt to privatize a publicly owned enterprise faces acute response by trade unionists and the political power does not show great commitment to the utilization of large publicly owned abandoned property.
The topic was the subject of a discussion organized by the Hellenic Foundation for European and Foreign Policy, the Foundation for Economic and Industrial Research, the "Kantor" consulting agency, the organization "Civil Movement" and the Greek branch of "Transparency International".
Eurobank EFG Group Managing Director Nikolaos Karamouzis noted that privatization in Greece began in the 1990s in a particularly hostile environment. "Today, it is conducted within the attempt for structural reorganization of the economy. It has been largely imposed from "above" and was not the choice of the political governance of the country." He said the creation of a balanced market economy and privatization is no longer ideological, but a real choice that is required, especially in the case of Greece.
"We must admit that government intervention has failed to bring the things its supporters planned and did not provide citizens with quality services. Over the past 20 years, the state has gained 24 billion euro from privatization and the main method used was the issuance of shares. It was aimed especially at fundraising, and in most cases, the state kept the control and management in privatized companies.
The second characteristic is that despite the two parties alternating in power, the political system and society have for years been negative to the privatization and utilization of public property, with very few exceptions. "
According to Nikolaos Karamouzis, there are four main factors that prevent privatization in Greece: "The imposition of a state interventionist model of economic development, of a clientelist system protecting the interests of certain groups. The presence of an environment hostile to the private initiative, which was supported by the failure of business ventures in the 1970s and 1980s. Creating corruption connections between the political system and specific business interests that enjoyed privileged relations with power in large sectors of the public sector. Creating clientelist connections between the political system and trade union movements in public enterprises, which have been dominating for decades in the public sector. The result was a mechanism for clientelist appointments in the party "armies" with no criteria, which, in turn, managed to secure three times higher income than in the private sector.
Privatization will not succeed if the political system does not believe in it and its contribution to the development and if the government implements it only because creditors have required it to do this. If this political criterion is not met, I fear that privatization will continue to be delayed as it has been until today."
Nikolaos Karamouzis recalled the "Eureka" plan. "I think that after yesterday's decision of the Eurogroup, this is still an interesting proposal - to give a company future revenues from concession agreements for the use of highways and the toll collecting desks. Based on these assurances, the European Investment Bank should prepare a detailed programme for financing private companies, partnerships between public and private sectors and major projects through banks. This, I think, is the best way to use the revenue from them. No property is sold that way. "
He also pointed out that the value of all public enterprises in Greece does not exceed 3 billion today. "The same companies were worth USD 15 billion in 2007. Therefore, even if we sell them tomorrow, we will reduce the foreign debt insignificantly. Times are very difficult for such privatizations. Furthermore, we will also give a reason to all those who want to prevent those efforts. So, I think we need to connect investment with the investor commitment that will implement a specific programme." Transport companies, which cost the state huge losses, are especially problematic in his view. "Although these issues are not on the agenda today and may cause reactions, we should seriously consider privatizing. Moreover, we have examples of this. Urban transport in Thessaloniki and Chania is private. Intercity transport is private too and it has not caused any problems to anyone so far." His second proposal was to give impetus to private sector involvement in providing social services. "Third, I suggest that loss-making public enterprises, for which there is no interest from private owners, should be offered to the employees against one euro after the state has removed the burden of their obligations. And if they do not want them, to offer the same package to private investors."
In a more political speech, Drasi party leader Stefanos Manos criticized previous Greek governments for their reluctance to carry out privatizations. He, as a minister in the government of Constantinos Mitsotakis, was the person who started this policy in Greece. Subsequently, however, it found no followers. Stefanos Manos said that for as long as Greek politicians themselves do not believe in this policy and do not state clearly to the people their confidence that it is correct, none of them will be implemented.
The old politician welcomed the decision by the eurozone finance ministers to grant a new bailout to the country. He, however, added that the target of making the foreign debt 120.5% of GDP is not enough. "This will be so if all goes as it should. But I do not think that the debt will be sustainable even then. Let me recall that it was 120% of GDP in 2009 and that is where we have ended up today. My opinion is that there should be another cut by 2020 to reach the value of about 90% of GDP. Then the debt will be sustainable. To achieve this, our party suggests that not 100 but 400 thousand civil servants should be fired, and in 2012 - 100 not 15 thousand as stipulated in the memorandum. The only difference is that we suggest that they should be paid 70% of their gross salary for the first three years after their dismissal until they find new jobs. Our second proposal is a programme of mass sale of unused public property, or making it available to investors for long-term use." Stefanos Manos repeated his proposal that he had presented in an interview for GRReporter in November. He stressed that there are many ways to recovery if the state decides to remove all the obstacles that it itself has laid in the way of this process itself.
"Before I start my speech I would like to inform you that I am a supporter of the idea of selling much of the public property as soon as possible. These are things that I have publicly supported and implemented to some extent before they were demanded from Europe," said the economist Panagis Vourloumis, who privatized the Greek telecom company OTE several years ago. He said the goal of privatization should not just be concentrating resources but "saving the nation's wealth from poor management by the state and transferring it to owners who will endeavour to utilize and develop it. Of course, it is important to ensure the highest possible price, but no less important is the stability of the buyer and his ability to develop the acquired asset." He also stressed that the people who will be responsible for the negotiations must have complete and unconditional political support. At the same time, it is necessary to mobilize the public sector to reject bureaucratic obstacles and support procedures.
Panagis Vourloumis took on the role of an adviser to the selling government and the buying investor. In his opinion, the assessment of the proposed site should be assigned to special economic advisers, because experience shows that public services are not able to cope well with the task of making the property attractive to investors. "If the site is associated with specific national interests, there should be two advisers having the confidence of the state. I have witnessed how a few sales were suspended because even low-level employees boycotted them. When selling a company related to the common good, it must be ensured that the investor will provide services at competitive prices." Panagis Vourloumis’ advice to potential buyers of Greek public property is to thoroughly check the offered asset. "If it concerns a public enterprise, it is necessary to check the labour laws in the country and in the company in particular. And this, despite the abolition of the ban on civil servants dismissals. The fact is that public enterprises could be sold much more quickly and at a much higher price if they were offered without their employees, allowing the new owner to appoint the staff." In conclusion, he advised investors not to accept the conditions that force them to share the management with the state or trade unions.
For his part, the managing director of the fund for public property utilization Costas Mitropoulos said that the privatization programme in Greece will be late in giving results due to a number of technical problems specific to the real estate in the country. "Lately, I have been haunted by several myths that are bothering me. The first is the value of public property, on which no research has actually been conducted and all is based only on hope and national pride. We are not the preference of the international market and it will not turn to us soon if we ourselves do not start behaving differently. "
Another myth, according to him, is that investors are likely to arrive in droves and the only problem they face is bureaucracy. "Well, you should know that in actual fact there are no investors," he said, causing polite harassment to other participants in the discussion. Costas Mitropoulos said that the number of Greek government properties is between 70,000 and 110,000, most of them being problematic. "25% of 3.5 million acres have been given to other owners already. We cannot get these properties back because they are legally tied with the state and take precedence over privatization." The answer to this statement came from Stefanos Manos, who proposed the seizure of the property. "Let us see how many of the "owners" will come to claim their rights and what documents they will present," he said.
According to Costas Mitropoulos, the revenue from the programme of the fund will be 50% from property sales, 35% from infrastructure utilization and 15% from the sale of public enterprises and shares of companies with public participation, the goal being to raise 19 billion euro. Soon, the national Natural Gas System DEPA, the Administrator of the Natural Gas System DESFA, 35% of Hellenic Petroleum, 29 public properties and other buildings will be made available for sale.
The lawyer Stratis Stratigis explained the importance of the right of property surface areas, which was reinstated in Greek law two years ago. It offers investors the opportunity to acquire ownership of the surface area of a single property for a specified period of time. Thus, the state keeps its ownership of the property until it receives revenue and profits from the rise in its market price. During the discussion, it was stated that Western investors prefer the right of surface, while those from the East prefer the traditional purchase of properties.