Gov?t banks on property for cash
The government is depending on the utilization of state properties in order to quickly secure revenues from the privatizations program in an effort lighten its debt load.
Prime Minister George Papandreou will be traveling to a eurozone summit later this month with a proposal for the use of public property through the issuing of bonds that could reduce the public debt by up to 50-60 percent of the country?s gross domestic product, while in cooperation with the Privatizations Fund, the Finance Ministry has started discussions with state corporations about making the optimum use of their real estate.
In the last few days the prime minister has been studying a proposal by the ?K? initiative, a nongovernmental organization. The proposal allows Greece to immediately draw funds of up to 100 billion euros from the use of its properties and is reminiscent of the ?Eureka? plan devised in Germany a few weeks ago.
This proposal is based on the creation of 15 companies that will acquire the state properties in groups, after their valuation. Each company will then proceed to the issue of bonds, guaranteed by the state and lasting for 10 years or more. The bonds will be bought by private investors, banks or even the European Financial Stability Facility (EFSF). When the bonds mature, the state can repay their value and regain the ownership of the properties, otherwise they will turn into shares of the companies owning them and controlled by the bondholders for good. Crucially, any time the state has the liquidity to repay the bonds, it will be able to regain possession of the properties, as the bond agreement will dictate.
Meanwhile, a last-minute amendment tabled on Friday in Parliament abolishes the exemption from taxation of incomes up to 30,000 euros per year for self-employed people aged 35 or under, with a retrospective application from January 1, 2011.
The law had originally provided for an income tax exemption for those who obtain profits up to 30,000 euros per year for the first three years following the setup of their commercial enterprises or profession, provided that they had not been over 35 years old when they established their business.
