The Chinese are interested in airports, harbours and railways.
The Russians are determined to infiltrate the energy market. The Qataris
have made clear they want to invest in property.
Three years to the month after becoming the first eurozone country to be bailed out by the
European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF),
Greece
has finally got its long-delayed privatisation campaign off the ground,
and the programme has turned the debt-choked country into a
battleground for nations seeking access to the EU trading bloc.
"We
have to transmit the message that this is a different Greece," the
development minister, Kostis Hadzidakis, said in an interview. "We have
to surprise in a positive way. Privatisations will send the message that
we are a business-friendly country."
The prime minister, Antonis Samaras, took that message to Beijing this month, urging
China
to participate in what he described as Athens' success story. He was
buoyed by a raft of unusually good news: international creditors had
agreed to prop up the economy with another €8.8bn (£7.5bn) in rescue
funds, Fitch had upgraded Greece's credit rating, while borrowing costs
on 10-year bonds in May fell to their lowest level since the outbreak of
the debt crisis.
If ever there was a time, it was now, for the Asian tiger to pursue its desire to make Greece a gateway to
Europe
by investing in infrastructure projects beyond Piraeus port. As
Europe's biggest passenger harbour and one of its top 10 container
terminals, the docks at Piraeus have become an operational base for the
Chinese since Cosco, its state-run shipping company, paid €500m to lease
half of them in 2010.
"Greece can become a real gateway for
investment and trade flows between China and Europe, " said Samaras,
whose conservative-dominated coalition has been credited with bringing
political stability to the crisis-hit country since it assumed office
last June. During his visit, 11 bilateral agreements were signed with
Chinese officials, who have also signalled their interest in taking over
Athens' international airport.
Last week, it was Moscow's turn, with Alexey Miller, the powerful head of Gazprom,
Russia's
biggest gas producer, flying into Athens for the third time in as many
months to discuss buying Depa, Greece's natural gas corporation.
Gazprom, which supplies 90% of Greece's natural gas through a pipeline
from Bulgaria, made a preliminary €900m bid for Depa last year, although
insiders say the deal will probably be closed for €750m.
As the
country's sole retail gas distributor, Depa is one of two companies
viewed as the jewel in the crown of a privatisation programme that,
though wildly off target, is among the most ambitious undertaken on the
continent of Europe. The other is the state gambling monopoly Opap, a
third of which was sold to Greek-Czech investors this month.
In
private talks with Samaras, Miller made clear that Moscow not only
wanted to take over the corporation, but would brook no interference in
the deal. The US and EU have raised objections to Russia exerting
further influence over the energy sector in what has become an
increasingly delicate geopolitical balancing act for Greece.
Cosco terminal at the port of Piraeus. The docks have become an
operational base for the Chinese. Photograph: Alkis Konstantinidis/EPA
Over the weekend, Greek officials said plans were afoot to sell
Desfa, the natural gas network's operator, to Azerbaijan's state oil
company, Socar, which is believed to be backed by US interests "for the
sake of equilibrium".
A deadline for bids for Depa, originally set for 29 May, has been scheduled for early June.
In
his office overlooking Syntagma square, Hadzidakis claims that what
Greece has experienced is more than just an economic crisis. "It is an
historic moment, a turning point for our country, the fight of our
generation that we are condemned to win," he said. "If we are successful
in selling both Opap and Depa, then we win a central battle and the
privatisations to follow will be easier," adding that the government
would work on the principle of selling to the highest bidder. "The whole
process is fully transparent."
In its sixth consecutive year of
recession, Greece, the recipient of €240bn in rescue funds, the biggest
bailout in western history, is under immense pressure to push ahead with
privatisations to cut a debt load that is projected to reach 185% of
GDP this year. Samaras's tripartite coalition has similarly announced
plans for the gradual denationalisation of the country's biggest
electricity generator, DEH.
The breakneck speed at which the
privatisations are taking place – regional airports, industrial real
estate, sporting facilities, beaches, state-run hotels and even thermal
baths were recently handed over to the state privatisation fund, Taiped –
follows earlier criticism from the EU that the sell-offs have been
painfully slow.
The programme, initially aimed at raising €50bn by
2019, has been repeatedly scaled back, with the government now
intending to raise €11.1bn by 2016 and €25bn by 2020. A goal of €2.6bn
has been set for 2013.
"Privatisations are never going to solve
this country's financial problems," said Prof Theodore Pelagidis, head
of economic analysis at Piraeus University. "But it is hoped they will
eliminate state-linked corruption and increase production efficiency."
Hadzidakis
said the privatisations would be the best proof yet that Athens is not
only determined to revitalise investor confidence, but committed to
pushing ahead with unpopular reforms.
Highly sensitive, the sale
of prized state assets, or "the family silver", has long been perceived
as the ultimate humiliation for a nation hobbled, more than any other on
the periphery of Europe, by the punishing effects of relentless
austerity.
"Even those who were against privatisations can accept
them now," said the politician who had first-hand experience of public
resistance to the sell-offs when he oversaw the sale of the nation's
official carrier, Olympic Airways, in 2009. "They understand that
privatising state-owned organisations is a prerequisite to tackling the
problem of unemployment," he added, referring to Greece's record jobless
rate of 27%. "People can see that the public sector is unable to create
new jobs."
Gazprom chief Alexey Miller, left, leaves the Maximos mansion after a
meeting with the Greek prime minister, Antonis Samaras. Photograph:
EPA/Alexandros Vlachos
To this end, he added, it was vital that potential investors were
given the "red-carpet treatment" rather than the "red-tape nightmare"
widely blamed for the country's notorious lack of competitiveness.
"Our
objective," said Hadzidakis, "is to make Greece a transit hub in the
broader region, which is why we are also working with the World Bank to
see how we can develop a logistics sector as well."
Such is the
desire to lure investors that the Greek parliament recently passed
legislation offering five-year residence permits to non-EU citizens
purchasing property worth more than €250,000.
The move was widely
seen as a sop to the Chinese, who are keen to be able to travel freely
in the 27-nation EU bloc. Although the Qataris have also expressed
interest in developing Athens' former airport at Hellenikon, pouring
€100bn into a joint investment fund, few, if any, EU member states have
exhibited any desire to invest in Greece.
For all the official
euphoria, the sell-offs have been the focus of widespread criticism,
with opponents pointing out that at a time of depressed market rates,
Opap, once the nation's most profitable state enterprise, received only
two bids for the 33% stake in the company.
The winning bidder, the
Emma Delta fund, will pay €652m for the stake plus management rights in
the company, nearly €100m less than its market value based on the
company's share price on the day the offer was submitted. However,
Athens' total receipts from the sale will rise to €712m after dividends
under the terms of the deal.
The reduced price tags have prompted
political opponents to pledge to take to the streets once again and also
to describe the programme as more of a "sell-out" than "sell-off".
"They
are trying to convince us that the climate is changing because they are
forging ahead with the programme of pillaging national wealth, which
they call the privatisation programme," said Alexis Tsipras, head of the
main opposition party, the radical-left Syriza. "What they don't say is
that the sales, the change of ownership of profit-making organisations,
are not about [to bring] investment. They won't bring growth or jobs."
What is up for grabs
Athens'
old international Airport Hellenikon, which at almost 70m sq ft, is
three times the size of Monaco. It is also Europe's biggest development
project
Natural gas corporation Public power corporation
Ports of Piraeus and Thessaloniki
Regional airports
Island marinas
Rail network
Water companies in Athens and Thessaloniki
Formerly exclusive state-owned Xenia hotel chain
Real estate for tourism development
Beach plots
Thermal baths