How Greek privatization fund will work?
One of the key elements of the agreement on Greece’s bailout of 86 billion EUR is Greek privatization fund that will transfer part of its assets worth about 50 billion EUR to the fund, which has yet to be approved by the Greek Government on Wednesday, will raise funds for Greece or by selling assets […]
One of the key elements of the agreement on Greece’s bailout of 86 billion EUR is Greek privatization fund that will transfer part of its assets worth about 50 billion EUR to the fund, which has yet to be approved by the Greek Government on Wednesday, will raise funds for Greece or by selling assets or by operating them at a profit. The fund will be divided, with half of the 50 billion EUR will be used to recapitalize banks, 25% installments debts and the remaining 25% will be reinvested in the Greek economy, according to MF News. But what exactly is the privatization fund?
Why Greece needs privatization fund?
The fund will act as a guarantee for creditors of eurozone who feel that Greece has consistently failed to fulfill its promises of reform. Some of the reforms in privatization, which were the basis of the earlier loan to Greece in 2010, for example, have not yet met.
What will contain the fund?
According to the statement of the euro area, presented details of the deal to bailout Greece, the Fund will include “Greek valuable assets”. It will be created and managed in Greece by the Greek authorities, but will be under the supervision of “relevant European institutions”. So far there are no further details exactly which Greek assets will be part of the fund, but probably among them will be large public companies and enterprises and will include shares in Greek banks, electric companies and utilities, airports and ports. There has been speculation that the Fund may involve State land and property.
How long has Greece to sell assets?
According to the statement of the fund’s assets will be sold throughout the term of the loans given by lenders. This initial transaction aims to cover Greek financing needs for the next three years. Loans from the European Stability Mechanism, the eurozone rescue program, however, will have longer periods of 10 years or more, which means that Greece has a time to sell state assets.