Greece Begins Sale of State Assets To Ease Massive Debt

Under enormous pressure from the European Union (EU) and International Monetary Fund (IMF), the Greek government has commenced a program to sell of certain domestic assets in order to reduce the country’s burdensome debt.

According to Finance Minister George Papaconstantinou, Athens will immediately seek to dispose government-held positions in Postbank, OTE Telecom, the Athens and Thessaloniki ports and the Thessaloniki water company.

The government seeks to sell up to 50-billion euros through the privatization of state-controlled assets.

Papaconstantinou also said Athens will form a sovereign wealth fund, which will include real estate assets to accelerate the disposal

The Greek government needs to reduce its deficit to 7.5 percent of GDP this year from 10.6 percent last year.

The Greek cabinet is also considering even more severe austerity to cope with the ongoing debt crisis – including raising planned budget cuts to 6-billion euros, more pay cuts for state workers and layoffs.
Meanwhile, the German weekly paper der Spiegel reported that the Prime Minister of Luxembourg and head of the eurogroup, Jean-Claude Juncker, again brought up the idea that Greece could be allowed to engineer a soft restructuring or debt reprofiling if the government were able to meet some tough policy targets.

Such a measure could involve a delay in the repayment schedule and a reduction in interest payments – subject to approval by Greece’s lenders.

In the case of a national bankruptcy with a subsequent debt restructuring, we would be letting a genie out of the bottle without knowing in which direction it would be flying, he said.