Sun, Dec 13, 2015 - Page 6 News List

Deal to unlock more funds for Greece

SPENDING POLICYMAKERS:Athens and lenders agreed on the details for a new fund, with a supervisory board to have seats on both sides, each with veto rights

Reuters, ATHENS

Greece and its international lenders have struck a deal on the latest set of reforms needed for Athens to receive 1 billion euros (US$1.099 billion) in further bailout aid, Greek Minister of Finance Euclid Tsakalotos said on Friday.

The reforms relate to a new privatization fund, a shake-up of the power sector and how to open up the market for non-performing loans.

The Greek Parliament is to vote on the bill next week, Tsakalotos said.

The two sides reached an agreement on the structure of the new privatization fund, whose revenues are to be used to boost investment and pay down the national debt, as demanded by Germany and other creditors.

“The new fund will have a supervisory board, which will be appointed by both the government and the lenders,” a government official told reporters.

Greece is to pick three and the lenders two of the supervisory board’s members, but both sides will have veto rights, the official said.

The board is to name the management of the new fund, which will consist of Greece’s current privatization fund (HRADF), the bank rescue fund (HFSF), real-estate assets and state holdings in public utilities, the official said.

Greek Prime Minister Alexis Tsipras’ government wants to speed up negotiations and open the way for talks on debt relief, seeking urgently to convince Greeks that their sacrifices will be rewarded.

Greece and its lenders also agreed that the state is to take a stake of at least 51 percent in power grid operator ADMIE, which is now fully owned by the dominant power utility PPC.

The rest will be privatized, a Greek Ministry of Energy official said.

PPC itself is 51 percent state-owned.

“We are already achieving significant victories in this hard negotiation with our lenders, like the one we achieved yesterday by keeping ADMIE in state hands,” Tsipras told parliament.

Athens halted the sale of a 66 percent stake in ADMIE after Tsipras won an election in January. It agreed under a third bailout deal in August to either restart the tender or find other ways to open up the electricity market.

A 20 percent stake in the grid operator is to be sold to a private investor and 29 percent is to be floated on the Athens stock exchange, the energy ministry official said.

“We are open and we will try to have a European electricity transmission operator also participating as a minority shareholder,” the official said.

ADMIE has a book value of about 900 million euros and Greece is to appoint an independent valuer to assess the price it has to pay PPC for the majority stake. It was not clear how the cash-strapped government would pay.

Athens is still struggling to keep non-performing loans to small business and consumers out of the clutches of “vulture funds” that buy loan books of distressed debt at a discount and try to recover the money.

Greek Minister of the Economy George Stathakis said that the agreement for non-performing loans would open up the market for loan transfers, but excludes mortgages for primary homes, consumer loans and those of small and medium-sized enterprises, for which there is to be a regulatory framework put in place by Feb. 15.

The latest reform bill was expected to be submitted to parliament yesterday.

The government aims to secure parliament’s approval on Tuesday to get the 1 billion euro tranche by Friday.

It will then have to pass other reforms — including a major restructuring of the ailing pension system — to conclude its first bailout review and open talks about debt relief.

This story has been viewed 1570 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top