Euro zone, IMF to press Greece for foreign agency to sell assets

Thu Aug 29, 2013 6:22am EDT
 
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By Robin Emmott

BRUSSELS (Reuters) - Greece's international lenders will press Athens next month to transfer state-owned real estate to a holding company managed by the euro zone to spur flagging privatization efforts, officials said on Thursday.

The plan, to be put to the Greek government by the troika of lenders - the IMF, the European Central Bank and the European Commission - in September, will propose creating a Greek-owned holding company outside Greece and run by foreign experts.

The plan, first suggested two years ago, reflects growing frustration with Greece, which will probably need further aid and has made scant progress in reforming its public sector and selling assets.

Acting as a warehouse for property, it would seek to overcome Greek bureaucracy that has undermined the privatization program, agreed as part of a 240-billion-euro ($320-billion) rescue. It will also ensure that the money raised will help pay off Greece's debt.

"The main point is to maximize the value of state-owned real estate assets in Greece by making them more attractive for investors," said a spokesman for the European Stability Mechanism (ESM), stressing that the plan had not yet been discussed by euro zone finance ministers.

"The benefit of privatization is to generate resources for Greece to help overall development and pay back its own debt faster," said the spokesman for the euro zone's bailout fund.

The idea of transferring assets to a Luxembourg-based holding company was reported by Reuters in 2011, when Finland supported it. Luxembourg attracts multi-nationals seeking lower corporation tax and is home to other special purpose vehicles

A Greek finance ministry official said the holding company would issue asset-backed bonds to pay down Greek debt.   Continued...

 
People walk past closed shops at an arcade in central Athens June 6, 2013. REUTERS/Yorgos Karahalis