Les requins continuent de tourner autour de la Grèce.
AutomaticEarth . Ilargi: 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece’s national lottery.
All these things are for sale in Greece. As part of the IMF/ECB/EU bailout deal Athens voted in this week, this wholesale firesale of what amounts to something close to an entire public economy, is supposed to bring in €50 billion ($72 billion). And what will Greece be left with afterwards? They’d better come up with something good, because estimates are that the firesale will fall short by some 75%. Kerin Hope, Ralph Atkins and Gill Plimmer in the Financial Times:
The austerity measures call for an independent privatisation agency to be established within weeks to handle a programme of disposals, including the sale of strategic stakes in state- owned utilities and leases in state-owned property for tourist development. Independent research suggests, however, that Greece will struggle to raise much more than a quarter of the €50 billion it needs from the assets sales and privatisations unless it adds more prime land and cultural heritage to its sales list.
Only €13bn of assets are ready to sell, leaving a €37bn shortfall, says a study by the Privatisation Barometer, a Milan-based institute sponsored by Fondazione Eni Enrico Mattei and KPMG. This includes €6.6bn from offloading stakes in 15 listed groups and an « optimistic » €7bn from the sale of 70 unlisted groups, where the yields are more difficult to assess. « At this stage, no one really knows what Greece Inc is worth, but it’s clear that it will fall short, » said Bernardo Bortolotti, a corporate finance professor at the University of Turin who produced the analysis.
Ilargi: Greece Inc. Put up for sale by a bunch of foreign governments and creditors and a government made up of domestic elites. Something here stinks. Did the IMF, ECB and EU really have no idea at all that the firesale sale profits would be far short of €50 billion? And if they did, which looks far more likely, what does that tell us? And what happens after that disppointing sale?
First, back to the reasons behind the expected firesale shortfall. Rupert Neate for the Guardian:
Debt-laden Greece finds no buyers in ‘fire sale’ of national assets
Economist . A new plan to cut Greece’s debt looks doomed to fail
SOME years back a Greek finance minister, fed up with his country’s waste and extravagance, claimed that he could save money by shutting down the national railway and driving its passengers around in taxis. He was accused of hyperbole but seems, rather, to have been guilty of understatement. In 2009 the Greek railway collected just €174m ($250m) in fares and other revenues. Meanwhile, it spent €246m on wages and lost a total of €937m.
On June 29th, with tear gas billowing around the rioters outside the Greek parliament, politicians in principle backed a new punishing austerity plan. As The Economist went to press, they were expected to implement the austerity plan in a second vote. That would open the way for the euro-zone countries to approve a second rescue package for Greece likely to be worth around €120 billion.
Alas, Greece’s austerity plan looks doomed to fail. It does too little to prevent the epic folly of Greece’s railways and other ruinous schemes. It will screw down too hard on ordinary Greeks, with new taxes, spending cuts and a rushed privatisation scheme. And it will almost certainly condemn Greece to recession, strife and an eventual debt default.