Lessons for U.S.? Greece to Sell $42.9 Billion of Government Property to Reduce Debt


Tuesday May 31st, 2011   •   Posted by David Theroux at 5:44pm PST   •  

In a new agreement reported by William Boston in the Wall Street Journal, “Want to Buy a Piece of a Greek Island?”, the government of Greece is taking steps to sell off and privatize a small amount of its enormous holdings of government-owned property. Will this properly begin the process of divesting to the general public the Greek government’s socialist land dealings or simply serve to create more bailouts and cronyism?

Now might be your chance to buy that portion of a Greek island you have been coveting.

As part of Greece’s privatization plan to raise cash to reduce its mountain of debt, the national government is preparing to sell as much as €30 billion ($42.9 billion) of public property. It is still early in the process, but future sales are likely to include assets ranging from the government’s stake in the Mont Parnes Casino resort in Athens, hotels, and even a concession to develop a luxury resort with a world-class golf course on the island of Rhodes.

The Hellenic Public Real Estate Corp., the government body that manages public property, has a list of about 75,000 individual government-owned properties. The corporation has appointed National Bank of Greece SA to lead a consortium of advisers who are now preparing to sell an initial portfolio of 20 to 30 properties, the first of which could be put on the market in the next few months, according to Aristotelis Karytinos, general manager of the real-estate division at National Bank of Greece.

The International Monetary Fund, in its latest report on Greece, estimates that as many as €15 billion could be raised through real-estate sales. Mr. Karytinos says expected proceeds from property sales or leasing is now estimated at between €15 billion and €30 billion. The first step is to sift through the long list of public property, identify the best real estate, and resolve any legal issues to ensure that the property is able to be fully developed by investors.

“We more or less know what the government owns, but many of the properties may have some legal or technical problems that need to be resolved before we can exploit them,” Mr. Karytinos said in an interview. “In some cases, we may have to rezone properties.”

The real-estate privatization is part of a broader program to sell government holdings valued at about €50 billion, which Athens agreed to do to obtain a €110 billion bailout by the European Union and the International Monetary Fund. The IMF has been pressing Greece to accelerate the privatization process and is particularly keen to see Athens dispose of stakes in properties and industries that it believes are better left to the private sector, such as running gambling casinos. . . .

For the full article, please click here.




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