Greece to Sell Assets to Speed Debt-Reduction Plan

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Greece will create a sovereign wealth fund composed of real estate and state-owned assets as it looks to accelerate its deficit reduction program, according to the Greek finance minister George Papaconstantinou.

In a May 23 statement, Papaconstantinou announced that the cabinet had agreed to take “additional measures” to raise an additional 6 billion euros, in order to achieve the country’s deficit reduction targets.

The government will push through sales of its stakes in Postbank, OTE, the main ports in Athens and Thessaloniki and the Thessaloniki water utility. A sovereign wealth fund will be created to hold assets for sale and privatization.

“Following the unprecedented reduction of the fiscal deficit by 5 percentage points in 2010, and the wave of structural reforms in pensions, the labour market, budget, tax and business environment, the government is determined to continue and accelerate the path of fiscal consolidation and structural reforms,” Papaconstantinou’s statement read.

Greece is under enormous pressure to demonstrate that it will not need to undergo restructuring of its 110 billion euro ($154 billion) IMF/European Union debt.

Fitch Ratings cut its rating of Greek debt by on Friday, and European markets hit five year closing lows on Monday as this, and a Standard and Poor’s downgrade of Italy to negative, from stable, deepened concerns about the Eurozone.