Europe Economy

Greek Asset Sales Won’t Raise More in 2012: CEO

Reported by Julia Chatterley, Written by Holly Ellyatt

The likelihood of Greece raising more funds through its privatization efforts this year is “very low,” the CEO of the Greek privatization program said on Tuesday.

Greek Privatization Program Is About Growth: CEO

One of the major conditions for Greece’s bailoutwas the privatization of assets via a fund called the Hellenic Republic Asset Development Fund, a move that many Greeks regard as a cheap selloff of the country’s assets.

Speaking in Athens, the fund’s CEO, Costas Mitropoulos, defended the aims of the fund.

“The dominant factor of our privatization program is growth. It’s a huge reform program and it has very little to do with actually collecting cash,” he told CNBC’s “Squawk Box Europe.”  

“Of course, we hope to collect some cash, it’s necessary for funding the State, but fundamentally, it’s a huge reform program.”

Mitropoulos said the fund expected to attract a multi-billion euro investment into the ailing economy — down the line.

“We expect this to bring in a secondary wave of investment to the tune of 20 billion euros over the period to 2020, and that’s of huge benefit to the ,” he said, adding that most of the benefits would stay in Greece and would provide jobs in a country where unemployment has now reached 21.7 percent.

Though the fund has collected 1.6 billion euros so far this year, Mitropoulos conceded that the chance of any further money being raised in 2012 is low.

“The likelihood is very, very low,” he said, “given the high level of political uncertainty right now.  If things go well and we get a strong and robust government after the election, then we hope to collect some cash by the end of the year.”

Political uncertainty continues days before the election on June 17, with polls showing that — as in the first elections held in early May — Greeks expect a broad coalition to result and for Greece to stay in the euro. But analysts are not so sure.

The think tank Open Europe reported on Monday that there is a 60 percent chance of a compromise being reached on reforms, yet ratings agency Standard & Poor’s gives a 1-in-3 chance that Greece will leave the euro zone.

The Hellenic Republic Privatization Program aims to attract foreign investors by selling off land and infrastructure, including national and regional railways, airports, motorways and aircraft. 

Asked what would happen should the anti-austerity party win the election, Mitropoulos said the outcome for the country would rely on whether the new government remained committed to the reform program.

“We’ll see what the Greek people will decide,” he said, though a win for Syriza would mean the probable scrapping of the privatization program.