Greece's ambitious plan to raise 50 billion euros ($70.8 billion) from asset sales in 2012-15 can help reduce its debt mountain by 20 percent, its finance minister said in a newspaper interview on Saturday. Last month Greece agreed with its international lenders to substantially scale up its state divestment agenda as part of efforts to shore up its battered finances and get out of a huge debt crisis.
Athens has imposed stringent austerity measures as a condition of the 110 billion euro bailout it agreed with the European Union and International Monetary Fund in May last year to avoid defaulting on its debt. "Securing 50 billion euros from this programme, provided this is achieved by 2015, will mean a public debt reduction of about 20 percent, a huge relief in debt servicing costs," Finance Minister George Papaconstantinou told financial daily Imerisia in an interview.
The government aims to sell stakes in railways, water utilities as well as real estate, including concessions, to raise the targeted proceeds, starting with 15 billion in 2011-2012. Returning to growth is crucial for the indebted country, especially after late 2012 when bailout funding runs dry. The government will need revenues to service a debt ratio projected to reach 157 percent of gross domestic product in 2013.
The minister told the paper that decisions on state divestments, including stakes in OTE Telecoms, Public Power, OPAP, would be based strictly on whether they serve the public interest. "The benefit of the state from such transactions, which are also affected by the valuations of these companies, will be the criterion for our decisions and not any company-specific (union) reactions," Papaconstantinou said.
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