Beaches, islets, ports and airports are in the list of real estate made by the government. The finance team discusses the idea of renegotiating the tax rates of the 110bil loan or alternatively the issuing of new loans by the European Support Fund using as guarantee part of this real estate.
According to protothema.gr informations the last two weeks when it was obvious that troika would press for measures of immediate decrease of state debt (and not just of deficits) through privatizations and sell of real estate, the idea to attempt a major decrease of loan costs by using privatizations and real estate as guarantee, began to gain ground.
This plan foresees a list of real estate and companies to be divested or used as “coverage” for our lenders, so that either the troika accept to decrease our debt rate to 5% or Greece be given new low rate loans. Such a development, say the initiators of the idea, could sweep down along with the spreads paving the way for Greece’s return to the markets.
According to protothema.gr informations the last two weeks when it was obvious that troika would press for measures of immediate decrease of state debt (and not just of deficits) through privatizations and sell of real estate, the idea to attempt a major decrease of loan costs by using privatizations and real estate as guarantee, began to gain ground.
This plan foresees a list of real estate and companies to be divested or used as “coverage” for our lenders, so that either the troika accept to decrease our debt rate to 5% or Greece be given new low rate loans. Such a development, say the initiators of the idea, could sweep down along with the spreads paving the way for Greece’s return to the markets.
What will be utilized
The disadvantage of this proposal, beyond the political reactions, lies mainly with the weights of the properties of the public real estate, and reduce the 400bil euro treasure into the realm of myth. However, the best real estate can get good prices even in he crisis period even as forfeit since they are not intensely affected by the finance cycle and recession as are the shares of listed companies for example.
However the finance team is not entertaining any illusions as the EC representative Servaas Deroose that 5bil will enter the public funds until 2012 (that’s the total of the Arab investment and not part of the land purchase) and 10bil more from state participation in several companies.
The tourist real estate will hit the auctions first. The ETA files contain 360 properties, of 30bil euros total value from which they can use a lot less bringing down the estimated amount to 20bil euros.
In about 10mil euros is the exploitable property of the real estate company of the state that deals with large public land with many unknown owners. But many parts of these lands have been violated by arbitrary properties.
An ace up the government’s sleeve might prove to be the 500 islands that according to IOBE estimates are offered for tourist and investment interest.
Bargain at Ecofin
Giorgos Papakonstantinou will have critical discussions today and tomorrow at Eurogroup and Ecofin meetings on the extension and reduction of interest rates for the loan of our country through the European Support Mechanism. There, the minister of Finance may give an idea to the partners for the projects for use of state property.
The Finance ministers are paving the way for the Summits on March 11 and 25 and the markets are eager to “see the smoke” to be convinced for the EU decisions since setbacks and delays resulted again in an explosion of European interest bonds.
Whatever is decided for the New Support Fund, for its capitals and responsibilities, it is directly related to Greece who wants an extension and decrease of debt and interest rates.
The European IMF
According to Spiegel it will be a European “IMF”, the Permanent Support Mechanism (EMS) for countries with problems such as Greece, which will replace the “temporary” Rescue Fund (EFSF). It will manage funds of 500bil IMF type loans “and will provide mild restructuring processes, with the non payment of countries’ debts as the ultimate solution.
Merkel’s plan provides for strict surveillance of the countries and a new Agreement of Competitiveness.
The countries will be audited with measurements of competitiveness where the prevailing factors will be the low wage cost. The financial stability will also be checked.
With this German model, each country will receive a good grade if:
- it advances to disconnection of the wages from the inflation
- connects (see “increases”) the pension age limits based on the sustainability of its pension system
- places a commitment in its constitution for “debt break”.
by Kostis Piantzos
SOURCE: PROTO THEMA
