* Offshore privatisation agency first proposed in 2011 by
* Idea reflects growing frustration with slow Greek reform
* Chairman of Greece's privatisation agency fired in August
By Robin Emmott
BRUSSELS, Aug 29 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
privatisation 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
Acting as a warehouse for property, it would seek to
overcome Greek bureaucracy that has undermined the privatisation
programme, 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 maximise 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 privatisation 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.
"It is under discussion to base the holding company in
Luxembourg because it would be easier to run it from there. It
would be fully controlled by the Greek government," the official
said on condition of anonymity.
Under Greece's bailout agreement, the ESM was supposed to
draw up a report on how to raise money from real estate assets
currently not included Greece's privatisation plan.
Athens has screened for possible sale 81,000 real estate
properties with an estimated value of up to 28 billion euros.
Athens will propose by the end of this year a plan to prepare
those properties for securitisation or direct privatisation.
But Greek officials have rejected moving control of its
state property abroad, saying it would not solve the problems.
This time, Greece's international creditors are eager to try
to convince the centre-right government of Prime Minister
Antonis Samaras as the country's privatisations struggles.
Athens' original plan to raise 50 billion euros by 2016 was
scaled back to 15 billion euros. Only 5 billion euros have been
raised so far and the flagship sale of the country's gas utility
flopped this year when the only bidder pulled out.
The credibility of its privatisation agency was eroded in
August when the government dismissed its chairman for using the
private plane of a businessman who had bought a state company.