Greece dispels fears over privatisation after reforms passed

The Greek government rejects claims that the creation of a new fund will pave the way for state-owned assets to be privatised amid worker protests.

Photo by: Reuters
Photo by: Reuters

Protesters shout slogans and blow whistles during a demonstration in front of the parliament building, during a vote of an omnibus bill cutting spending on pensions, speed up privatizations and reform the electricity market, in Athens, Greece, Sept 27.

Greece has denied that an omnibus of reforms passed by the parliament on Tuesday amount to privatisation measures amid protests and worker walkouts.

All but one of the 153 lawmakers from Prime Minister Alexis Tsipras’ leftist-led coalition in the 300-seat parliament in Athens voted in favour of reforms that will see control of state-owned assets handed to an umbrella sovereign wealth fund.

Greek lawmakers attend a parliamentary session before a vote for an omnibus bill cutting spending on pensions, speed up privatisations and reform the electricity market, in Athens, Greece, September 27, 2016. (Reuters)

Greece is undertaking the reforms in a bid to unlock €2.8 billion ($3.14 billion) of loans in time for a meeting of euro zone finance ministers next week, an installment from the country’s third bailout in six years of €86 billion, as agreed in 2015.   

The fund, known as the Hellenic Company of Assets and Participations, will operate as a holding that groups the Hellenic Asset Development Fund (TAIPED) privatisation company, bank stability fund HFSF, state real estate and some state entities.

It will be chaired by Frenchman Jacques le Pape, a close associate of International Monetary Fund (IMF) head Christine Lagarde, but Greece's Finance Ministry will retain overall decision-making powers.

In accordance with reforms, Greece’s electricity utility PPC, the Attica metro company, and small arms manufacturer Elbo, will be among the first companies to be transferred to the fund for a period of 99 years. Airports, motorways and water utilities will also come under its control at a later stage. 

Ahead of Tuesday’s vote, water utilities workers in Athens and Thessaloniki, the country’s largest cities, staged a walkout to protest the transfers. George Sinioris, head of the water company workers association, vowed to stand against the move with court challenges, strikes, building occupations and “other forms of protest."

"They are handing over the nation's wealth and sovereignty," he said.

Greece's trade union federation urged workers to “use all possible means” to prevent a new wave of privatisations, while public sector union (ADEDY) also condemned the transfers. "Health, education, electricity and water are not commodities. They belong to the people," ADEDY said in a statement.

A protester shouts slogans as a demonstration of hotel employees against government plans for pension reforms march in front of the parliament building in Athens, Greece, September 27, 2016. (Reuters)

Meanwhile in Athens, demonstrators gathered outside the parliament chanting, "Next you'll sell the Acropolis!"

But Greek Energy Minister Panos Skourletis rejected accusations that the ruling Syriza-Independent Greeks coalition was leading a trend of privatisations. "Transferring (the assets) to the fund does not mean the state forfeits its property. Secondly it does not mean privatisation, and thirdly, these assets are not collateral for the loans of the country," he said in a parliamentary debate.

Measures not enough

With a debt pile that corresponds to 176 percent of its gross domestic product, which is expected to rise above 180 percent this year, Greece is desperate to meet the conditions proposed by lenders to qualify it for extra financial help.

On Wednesday, Prime Minister Tsipras painted a brighter picture of Greece’s future, predicting a growth of three percent in 2017. "All data points to not only revenue doing well ... but that we entered a positive growth cycle from the third quarter of 2016," he said.

National output in Greece has dropped by about a quarter in the past six years. 

A couple makes a transaction at an ATM outside an Attica bank branch with a graffiti on it in central Athens, Greece August 28, 2012. (Reuters)

The IMF has called on Greece’s lenders to do more to ease the country’s burden, warning that its forecast debt level will be unsustainable and that measures currently in place are not sufficient.

But with an unemployment rate of 25 percent and crippling austerity still gripping the country, Greeks are growing impatient both with their government and its lenders.

Earlier this month, a poll conducted by Greece’s University of Macedonia showed that 81 percent of respondents believed conditions in the country were deteriorating, while 85.5 percent expressed dissatisfaction with the government’s performance.

Support for the ruling Syriza party also fell to 17.5 percent, 10 percent behind that shown for opposition party New Democracy (ND).

TRTWorld and agencies