* Greece outlines privatisations, fiscal steps
* Selling stakes in utilities, banks, betting firm
* Aims at 3 billion savings this year to offset slippages
* Debt market falls further after German comments
(Adds union, opposition reaction, fresh quotes)
By Dina Kyriakidou and Lefteris Papadimas
ATHENS, April 15 Greece laid out plans to sell
stakes in key state firms and make further budget savings on
Friday but failed to quell fears of debt restructuring fanned by
a German official's comments.
The premium it costs Athens to borrow on debt markets rose
sharply for a second day -- by more than half a percentage point
-- after a German deputy minister was quoted as saying it "would
not be a disaster" for the debt-choked country to restructure.
Greece said budget slippages this year will be covered with
additional measures totalling 3 billion euros, including
fighting tax evasion and further state spending cuts, while
privatisations will bring in 2 to 4 billion euros in 2011.
"The government presented today a broad and specific
mid-term fiscal plan up to 2015," Finance Minister George
Papaconstantinou told Reuters. "This shows the commitment and
willingness to proceed with fiscal consolidation and proceed
further with structural reforms."
Speaking to a cabinet meeting, the minister said Athens will
sell its stake in betting firm OPAP (OPAr.AT), Europe's biggest,
and reduce its stake in power utility PPC (DEHr.AT) from 51
percent to as low as 34 percent by next year but retain
European policymakers have scrambled to reassure investors
this week that a restructuring was not on the agenda, saying
such a step could have dire consequences for European banks and
the fragile economy of the 17-nation euro zone.
But Germany's finance minister has acknowledged that further
steps may be necessary and analysts say that could involve
asking bond investors voluntarily to accept changes such as
smaller or later payments.
"A haircut or a restructuring of the debt would not be a
disaster," news agency Bloomberg quoted Werner Hoyer, one of
Berlin's deputy foreign ministers and a member of the junior
coalition party Free Democrats (FDP) as saying.
If Greece's creditors agreed that talks with Athens "would
be helpful toward a restructuring of the debt, then of course
this would be supported by us," Hoyer was quoted as saying.
The lack of detailed commitments in a keynote speech by
Prime Minister George Papandreou earlier on Friday had seen
Greek stock markets fall 2.7 percent. The spread of 10-year
Greek yields over German Bunds widened to 1,059 basis points.
Papandreou said more details and timetables about the
measures would come after Easter.
"The plan will be completed in the coming weeks and will be
then submitted to parliament," Papandreou told a cabinet
meeting. "Today we are presenting the basic guidelines of a
roadmap that will lead us from the Greece of crisis to the
Greece of creativity."
Analysts said the specifics on privatisations were welcome
news, showing political determination in the face of labour and
opposition parties' reaction.
"I think the market will react positively to the planned
state divestments, which show that the government is determined
to move forward despite union opposition," said Theodore
Mouratidis, an investment adviser at Fortius Securities.
But analysts said fiscal steps were less convincing. The
government has seen disappointing revenues due to tax evasion,
and deepening recession threatens to derail fiscal targets
agreed with the EU and IMF in exchange for its 110 billion euro
"Today's 'road map' has done nothing to settle the markets'
nerves," said Ben May, at Capital Economics. "We therefore
continue to think that it is only a matter of when, rather than
if, Greece is forced to default."
As expected, Greece said benefit cuts, effective tax hikes
and other measures would save about 23 billion euros in
2012-2015 and bring its budget deficit to about 1 percent in
2015 from 15.6 percent in 2009.
It also outlined how it intends to raise 50 billion euros
from privatisations by 2015, a target which many analysts and
Greek politicians see as optimistic. It said it planned to
promote real estate asset sales from October 2011.
Opposition parties criticised the plan as ineffective in
pulling Greece out of the crisis, and labour unions, which are
planning strikes in May, vowed to redouble their action.
"It doesn't matter how much family silver they sell, it
won't work," said Nikos Kioutsoukis general secretary of the
largest private sector union GSEE. "After these announcements,
we will take action."
The adoption of the mid-term fiscal plan was scheduled
before increased speculation about restructuring, an unexpected
upwards revision of the country's 2010 deficit and below-target
revenues in January and February put additional pressure on