The case of “Privatization in Times of Crisis” opened three years ago as a resource that would contribute decisively in the battle to reduce debt and deficits.
In June 2010, after a cabinet meeting, then Prime Minister George Papandreou announced a wide variety of ministerial privatization programs involving banks, ports, airports, roads, railways, utilities, and public property.
Half a year later, at the end of 2011, absolutely nothing had happened. The agenda of privatization in 2011 included scenes of international tragicomedy, with the Troika announcing that it will realize around 50 billion Euros from privatization.
In 2010 the 74 enterprises controlled by the state were worth about 44 billion Euros. Of course now, their value has fallen dramatically. However, If the state had decided to sell 10% of its enterprises in 2010, the taxpayers would be relieved from all the additional taxes they eventually paid compared to 2009. If the state had sold 25% it could also have paid 6 billion Euros owed to individuals (contractors, doctors, pharmacists, etc.) in the private sector. If it had decided to sell the 50% of state-owned companies in the country, the public would be spared from the brutal cuts in wages and pensions.
In a nutshell: The worst part of the crisis would be over, with minimum casualties in the private sector.
In early 2012 a more realistic target was set: collect 5 billion Euros that year. The actual privatization gains amounted to 84 million Euros. For 2013, things changed. The government of Samaras set more conservative goals — to collect around 2 billion Euros — and changed the strategy. However due to their failure to sell the public gas corporation DEPA, the target was automatically reduced and nobody knows if this can be achieved.
The Greek legal entity responsible for the privatization process, the TAIPED, “froze” its activities between May and July 2012, when the board decided that no decisions were to be taken until the formation of a new government. The formation of the new government, however, was followed by the resignation of the chairman of the Board. Recently his successor also resigned.
Privatizations have also slowed down due to litigation. More than 13 appeals have been filed to the Council of State. Unions (electricity, water, DEPA, OLTH etc.) and citizens requested that the decisions be held unconstitutional.
Bureaucracy is another serious problem. Until recently, 72 administrative acts and regulations were pending. Serious privatizations could simply not be materialized without those acts (State Lottery, DEPA, Greek, IBC, Afandou, Cassiopeia).
The way that until recently the Greek government has handled its property is totally anachronistic. They knew neither what that property was, nor it’s condition. Nobody bothered to document the problems.
The problem is a lethal combination of political apathy, which slowed down the processes, bureaucracy, and incompetence. Greece is a rich country, which could and should exploit its resources, by selling off assets through the market, securitizing its future income, and partnering with private investors. The aim should be twofold. First, earn some profit and use some of it to pay off debt. Second, open the economy to the international markets by deregulating the Greek economy.
The failed privatizations mean more taxes for average citizen, since the government revenue “gaps” are usually filled with taxpayers’ money and further debt. According to recent polls, more than 60% of Greek citizens are in favor of privatizations. Only bureaucrats, unions and ultra leftists together with political interests and rampant corruption inhibit the solution to the Greek crisis, which can only come from the private sector.
For this reason, my generation demands privatization to bolster the Greek economy.
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