Greece Must Stare Down Privatization Blackmail

The newly sworn in Greek coalition government is committed to restarting the economy, restoring confidence and boosting its reform credentials by taking action on long stalled privatizations. To succeed, it will have to move quickly, face down blackmail and convince mainstream citizens.


In 2010 Greece committed to a 50 billion europrivatization target which has remained close to frozen. This year it will even miss its modest targeted 3.2 billion euro goal and won’t raise more than 500 million euro from the sale of the Olympic Games site and the state-owned lottery. A lack of political stability, a tarnished international image and the obstacles of byzantine bureaucracy are being blamed.

But the country can no longer afford excuses or policy cowardice. Privatizations are not just necessary for immediate revenues to plug holes and pay down some debt, but to kick start growth and jobs and give fresh momentum to Greece’s business reputation.

The tripartite coalitionwhich is still finding its uneasy equilibrium includes conservative New Democracy, socialist Pasok and moderate Democratic Left. During this sweltering summer they have hammered out a new policy that seeks to conclude 28 privatizations in 2013. These will include many prime real estate holdings including the Hellenikon plot, betting companies, refiners, utilities, post offices and infrastructure like roads, marinas and airports.

Top of the list is the massively loss making railway, but the toughest challenge will be selling off parts of electricity monopoly PPC because a detailed framework will have to be in place to liberalize the energy sector.

Just days after conservative Prime Minister Antonis Samaras announced coalition government policy, the political thermometer hit blistering highs in the debt laden Mediterranean country. Communist party KKE, the radical left main opposition Syriza as well as fascist hard right Golden Dawn issued ultimatums that they would sink any sell-offs by disruptive street protest and impose delays through constitutional courts challenges. All hope of political cooperation and necessary reasoned dialogue instead of demagoguery had vanished.

Furthermore, militant electricity workers union GENOP-DEH has issued warnings that it will pull the plug and plunge the country into darkness if anyone even dreams of selling off even one lignite coal mine, let alone break up the costly behemoth. The opaque union is not concerned that it would decimate the all-important tourist season. Surprisingly, even the conservative leaning union group, DAKE, has bolted from the party barn against liberalizations and any shrinking of the woefully inefficient state sector.

Greek democracy, industrial peace, concepts of equity and entrepreneurship are going to be torpedoed if these threats materialize.

The fact that Samaras underlined in his keynote speech in parliament that he would not sell sensitive and strategic networks, the environment would be respected in any development, and reputable trade buyers would have to commit to bringing in know-how, capital and create jobs have been ignored. Even the likelihood that many privatizations may take the form of public-private partnerships and the reality that attractive sea side properties are undeveloped and wasted, being trespassed upon or turned into trash dumps has fallen on deaf ears.

A deputy from the main opposition Syriza warned that anyone signing off on sales could face jail terms or even the hangman’s noose in front of parliament. Syriza leader Alexis Tsipras warned that they would reverse any such deals when they come to power so investors would lose their money and face criminal proceedings.

What the dangerous demagogues must be reminded of is that if they reject privatizations and go to war, they risk the country losing financial support, entering into a spiral of default and a return to the drachma. That is when the local Drachma lobby vultures would be circling to pick up assets and real estate at a 50 percent discount even from current asking prices. A Greek euro exit would mean we would need to sell at any price to pull in foreign currency so we can buy fuel, medicine and food. By pushing for a national calamity, they are either by accident or design, playing right into the hands of those that really want to grab state jewels cheap.

The silent majority needs to turn its back on unfounded populism and reject the state-ism that has almost driven us to the wall. Greeks must no longer allow themselves to be held both as hostages and pay hefty ransoms that have driven their youth to join the overseas brain drain. After 40 years of loony left dominated debate, Greece has to properly exploit its wealth, unshackle itself from the parasitic public sector and honor its promises.

Nick Skrekas is Author, Economic Analyst and International Lawyer.