Greek liquidity sale now on.. Everything must GO, get in now before its too late.
July 6 2011 at 2:47 PM
Greece must sell off assets East German-style
Greece must privatise assets on a scale similar to the sell-off of East German companies at the fall of the Berlin Wall to rebuild its finances, the chairman of the Eurogroup of finance ministers said on Sunday.
“The sovereignty of Greece will be massively limited,” Jean-Claude Juncker, who is also prime minister of Luxembourg, told Germany’s Focus magazine.
On Saturday finance ministers signed off the release of the latest 12bn (£11bn) tranche of aid, rewarding the Greek government’s victory in a parliamentary vote on austerity measures.
These included setting up a privatisation agency at the insistence of the European Union and the IMF.
“For the forthcoming wave of privatisations they will need, for example, a solution based on a model of Germany’s “Treuhand agency”, said Mr Juncker, referring to the body that sold off 14,000 East German firms in 1990-94.
In comments that are likely to alarm Greeks sensitive to the prospect of foreign interference, he said teams of economic experts from around the eurozone would be heading to Greece. “One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the eurozone,” said Mr Juncker.
Athens has agreed this year to shed 5bn of state assets, including airports, utilities, banks and the post office, towards a total 50bn.
Once the world’s biggest holding company, Treuhand was supposed to generate a profit, but closed its books after a four-year fire sale with huge debts and having put 2.5 million Germans out of work.
Mr Juncker said the Greek tax system was “not fully functional” and added that the crisis in the nation was caused by wages increases becoming “completely out of control”.
In a move which will help soothe the markets’ anxieties over the embattled nation’s finances, yesterday Allianz SE, Europe’s largest insurer, said it plans to roll over 300m of Greek government bonds as part of the private-sector contribution to a second aid package.
The fifth tranche of the initial 110bn bail-out will be paid on July 15, following approval by the IMF board.