MISSTEPS IN BIG ASSET SALES PLAGUE GREECE AS PRIVATIZATION CHIEF RESIGNS
c.2013 New York Times News Service
ATHENS, Greece — The Greek government’s efforts to sell state-owned assets was sidetracked again when the chairman of the privatization agency was forced to resign after hitching a ride on the private jet of a Greek oil tycoon.
One of the ways Greece plans to dig itself out of debt is through the sale of state-owned assets. But that effort has been beset by missteps.
The latest involved Stelios Stavridis, the chairman of the government privatization agency, who had overseen one of the country’s first big asset sales — a one-third stake in the state gambling company, OPAP, for 652 million euros. But then he hitched a ride to a vacation spot on the private jet of a Greek oil magnate involved in the deal.
Government officials insisted that Stavridis’ ouster from the privatization agency, Taiped, was “for ethical reasons” and would not upset the country’s state sell-off effort. But it was the latest snag in a privatization program that has suffered from political upheaval and delays and has fallen far short of the revenue targets set by Greece’s so-called troika of foreign creditors, the European Commission, the European Central Bank and the International Monetary Fund.
The Greek finance minister, Yannis Stournaras, on Sunday sought Stavridis’ resignation from Taiped after a newspaper quoted the chairman as saying he had traveled last week on the Lear jet of the oil and shipping oligarch Dimitris Melissanidis, a major stakeholder in the Greek-Czech consortium, Emma Delta, that agreed to buy the OPAP stake in May.
After much wrangling over the details of the contract, it was signed on Aug. 12. A few hours later, Stavridis, a 65-year-old Swiss-trained engineer, joined the oil magnate on his plane, which dropped Stavridis on Cephalonia, an island in the Ionian Sea where he spends his summer vacations.
“Melissanidis, who was traveling to France, offered to take me with him to accommodate me,” Stavridis was quoted as telling the Proto Thema newspaper, which published a photograph of him, smiling, sitting next to a flight attendant.
Speaking to the Greek private television channel Skai after his firing on Monday, Stavridis defended his decision to fly on Melissanidis’ jet, noting that the trip had come long after the OPAP deal was completed. He referred to “hypocrisy” in Greek society which, he said, was interested in “the façade rather than the essence.”
“I am not a monk and I won’t hide,” said Stavridis, who founded Piscines Ideales, one of Europe’s largest manufacturers of swimming pools in 1991. More recently, he was head of the Athens water board, Eydap, which is also in the country’s privatizations portfolio.
Stavridis’ resignation came less than six months after his predecessor, Takis Athanasopoulos, was accused of a breach of faith during a previous stint at the head of the country’s electricity board. Prosecutors accused him of commissioning a power station in central Greece even though he knew it could not operate profitably.
The main left-wing opposition party, Syriza, which has vowed to reverse all privatizations if it comes to power, said Taiped was “a tool of the troika” whose goal was “the biggest sell-off of state wealth that Europe has seen since the era of East Germany.”
In a statement Monday, Syriza described the Stavridis affair as “the first clear admission of the dirty relationship between the government of the memorandum and business interests,” referring to the Greek deals for foreign loans.
The troika has urged Athens to speed up state sell-offs, and to step up tax collection, in a bid to raise much-needed money. But revenue targets have been revised downward several times. The original target of 50 billion euros by 2016 was later changed to 19 billion euros, then to 15 billion euros. Since last year, the troika has focused on annual targets. But Taiped is expected to fall 1 billion euros short of its 2.5 billion-euro target for 2013.
Representatives of the troika, which have granted Greece two rescue programs totaling 240 billion euros over the last three years, are due in Athens at the end of next month for a new inspection that is expected to focus on a revenue shortfall compounded by a lagging privatizations program and lax tax collection efforts.
Apart from OPAP, Greece sold the state gas network operator, Desfa, to an Azeri company for 450 million euros earlier this year. But the planned privatization of the state gas company, Depa, fell through in June when Russian giant Gazprom failed to make the only expected bid, despite a series of meetings between its chief executive and the Greek prime minister, Antonis Samaras.
The deal, which had been expected to net some 900 million euros, foundered after Gazprom cited concerns over Depa’s finances. But European Union competition concerns were also believed to have influenced Gazprom’s decision to walk away.
Samaras has been lobbying hard for privatizations and investments, which he has said are crucial to spurring growth and creating jobs in Greece, where unemployment exceeds 27 percent overall and is at a staggering level — 65 percent — for people younger than 25. But political and financial instability remains a concern among foreign investors despite Greece’s progress in cutting its debt.
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Greece posted a primary surplus — a budget surplus not counting debt financing — for the first six months of this year. But its debt burden remains unsustainable, the troika of creditors agree. Other eurozone nations, chiefly Germany, remain reluctant, however, to approve a second debt revamping following the debt restructuring with private-sector bondholders last year.
The issue of debt relief is expected to come to the fore again when troika inspectors return to Greece at the end of next month. The tone of those talks could be set by the outcome of German parliamentary elections set for Sept. 22. The issue of Greek debt, and how it should be handled, has featured prominently in the German election campaign, which is being closely watched by Greek government officials.
But other pressing concerns face Samaras and his ministers in the coming weeks. Priorities include completing a list of 12,500 civil servants who must join a so-called mobility scheme by September, under which staff members would receive reduced wages for eight months ahead of their transfer or dismissal. Thousands of teachers are on the list and are expected to stage vehement protests, possibly occupying schools. The program is designed to add another 12,500 civil servants by the end of the year.
Samaras got a taste of the difficulties of slashing the public payroll in June when his unilateral decision to shut the state broadcaster, ERT, prompted the third political party in the coalition to quit, leaving his government with a fragile majority in Parliament. Fired ERT staff members continue to occupy the broadcaster’s old offices, airing pirate programming via satellite, even as the government last week announced the first 577 hirings for an interim service which is to replace ERT until a new permanent broadcaster is set up.
Another controversial measure is the government’s plan to lift a moratorium on home foreclosures at the end of this year. The authorities have pledged to exempt Greeks with low incomes and the unemployed, but the initiative has rankled the opposition and several coalition lawmakers who have also vowed to oppose it.