Greece to Sell Assets to Help Pay Down Deficit - NYTimes.com_12933

Greece announced Wednesday its plans for a big sale of state-owned assets, as the struggling government moved to shrink its huge budget deficit and fulfill the terms of an international rescue package, David Jolly reports in The New York Times.The government will sell 49 percent of the state railroad, list ports and airports on the stock market, and privatize the country’s casinos,Handicapping the Battle Over NYSE Euronext - NYTimes.com 551, the Finance Ministry said after a cabinet meeting in Athens. The government will also sell minority stakes in water utilities serving Athens and Thessaloniki, sell 39 percent of the post office, and combine its vast real estate assets into a holding company to be listed on the stock market.The sales are intended to help raise 3 billion euros, or about $3.7 billion, from 2011 to 2013. The government agreed to raise a billion euros a year over that time as a condition of the 110 billion euro aid program it received from the European Union.Greece has been under pressure to get its finances in order since the Socialist government announced last autumn that its center-right predecessor had greatly understated the size of the deficit, which is now running at about 13.6 percent of gross domestic product.Anxiety in the markets about Greece’s debt has caused a slump in the euro and set off a financial crisis across Europe, as fears increased about the debt burden of other countries in southern Europe, including Portugal and Spain.Finance Minister George Papaconstantinou said after the cabinet meeting that the objective was “to have a state which guarantees public services, but at the same time taps the dynamism of Greece’s economy,” Reuters reported.The Greek Parliament in May approved austerity measures intended to save about 30 billion euros, or $37 billion, through 2012. The austerity plans, which have been met with strikes and sometimes violent public protest, include cuts to civil servants’ pay, reduced services, higher taxes and tougher retirement rules.The European Union and International Monetary Fund last month announced a package of measures valued at about 750 billion euros to help Greece and other struggling members of the euro zone gain time to repair their finances after borrowing on the market became prohibitively expensive. This was several weeks after countries in the euro zone approved 110 billion euros in aid for Greece.An official, who asked not to be identified because he was not authorized to speak publicly on the matter, said Greek ministers had “laid out a general framework for the government’s privatization goals, but the timing has been left unclear.”The official said that the ministers had not provided an estimate of the value of the expected proceeds of the sales, but that they thought the measures were worth significantly more than a billion euros a year.The state will maintain its stakes in Hellenic Telecom and the electrical utility Public Power.Panos Beglitis, the Defense Ministry official in charge of military procurement, told The Associated Press that the government would also end or slow purchases of military equipment.Mr. Beglitis said some of the deals under review included the purchase of warships, fighting vehicles and fighter jets, The A.P. reported.NATO figures show that Greece spent 2.8 percent of G.D.P. on its armed forces in 2008, or about 6.9 billion euros. That makes it the most expensive military budget in Europe in per capita terms, and second only to the United States in the alliance. Athens has justified such spending as necessary to keep up with its regional rival, Turkey, also a NATO member.Go to Article from The New York Times ?TagsEuropean Union, George Papaconstantinou, Hellenic Telecom, International Monetary Fund, Public Power Related ArticlesFrom DealBookGreek Parliament Passes Austerity MeasuresBest Hope for Greece: Minimize the Losses Previous ArticleLe Monde Seeks a Financial Savior Next ArticleGerdau to Buy Rest of Ameristeel for $1.7 Billion Previous ArticleLe Monde Seeks a Financial Savior Next ArticleGerdau to Buy Rest of Ameristeel for $1.7 Billion