State supports corporations with huge accumulated losses and debts

In a country that has been in crisis for almost a decade, with companies and households suffering from overtaxation, the state has been supporting eight major public corporations with accumulated losses of 12 billion euros, obligations of 17 billion euros, share capital of 11 billion and annual revenues of just 942 million euros. All eight are about to be transferred to the privatizations hyperfund.

The eight corporations employ some 20,000 workers and are the most counterproductive companies in the public sector, given that their annual expenditure of 1.36 billion euros is 45 percent higher than their revenues. They are Hellenic Railways Organization (OSE), Hellenic Defense Systems (EAS), Athens Urban Transport Organization (OASA), Hellenic Vehicle Industry (ELVO), Hellenic Aerospace Industry (EAB), Hellenic Post (ELTA), Buildings Infrastructure, and the Larco mining company.

On a per worker basis, the eight state corporations secure annual takings of 46,900 euros, with expenses amounting to 67,900 euros.

The biggest difference between spending and revenues is seen at EAS, whose operating expenses are nine times higher than takings. The expenses of ELVO, a defense company that is being wound down, were four times its revenues in the period from February 2014 to February 2015 – the last financial year for which company figures are available.

In the last year for which data are available, all eight corporations registered losses, of which the highest were racked up by OSE, at 366 million euros. With the exception of Buildings Infrastructure, seven out of the eight corporations have huge accumulated losses, led by OSE (7.25 billion euros), EAB (1.46 billion) and EAS (1.45 billion).

The government and the European Commission recently came to an arrangement for OSE’s accumulated losses to be written off, so that the railway company could continue without the burdens of the past.

The coverage of all of the above amassed losses is made through the capitalization of the debts of the corporations (whereby debt is turned into shares), whether they concern tax arrears, or debts to banks etc. The deficits of the state corporations are covered by taxpayers, and it is thanks to them that their share capital has grown disproportionately, to 11 billion euros for all eight.