Gov’t dragging its feet on state company utilization

The government is keen to keep a tight grip on state corporations, which is why the transfer of such companies to the new hyperfund for state asset utilization, officially titled Hellenic Holdings and Properties Company SA, has been allowed to drag on. The transfers are a part of the framework of the second review of the third Greek bailout program.

Greece’s creditors have said that the monitoring ministries should not be allowed to intervene in the daily operations of the state corporations, which do not face immediate privatization, but will be transferred – as the bailout agreement dictates – to the Public Holdings Company (EDIS), a subsidiary of the hyperfund.

The government does not want to lose the tight control it has on corporations such as public transport companies, Hellenic Post, the Athens and Thessaloniki water companies (EYDAP and EYATH) etc.

EDIS is supposed to receive the sum total of the state holdings in the corporations, and the inner cabinet on economic policy will convene on Monday to decide on the third batch of state companies to be transferred to EDIS – which has yet to be formed.

Utilization does not necessarily mean sale of shares, but it certainly involves more efficient administration. Crucially, it also entails a change in the control of the corporations, as they would cease to be within the competence of ministers. This will considerably limit their capacity to appoint managers and staff at the companies. That prospect has caused a considerable reaction in the cabinet. For instance, Infrastructure and Transport Minister Christos Spirtzis has already sent a letter to the inner cabinet expressing his opposition to the transfer of the 25 percent stake in Athens International Airport to EDIS. Economy Minister Dimitris Papadimitriou voiced his own opposition to the transfer of state assets of non-strategic significance, such as those in Central Markets and Fisheries Organization (OKAA) and the Thessaloniki Central Market.

Despite having agreed with creditors on the asset transfer, the government has not yet clarified the state’s relationship with the corporations after their shift to EDIS, which leaves their control status in limbo.