State firms burdening Greece with three billion euros

The government is seeking to dig Greece out of a debt hole to the tune of three billion euros created by five of Greece’s state-run corporations (DEKO).

Speaking in Parliament on Wednesday, Finance Minister Christos Staikouras referred to “difficult cases” that we “are not hiding under the rug.” 

“We are daring to confront the big problems [the companies] have with realism and responsibility toward workers and society.”

More specifically, the debts have been accumulated by Larco, one of Europe’s biggest nickel producers, the Skaramanga Shipyards, Hellenic Aerospace Industry (EAV), the Hellenic Vehicle Industry (ELVO) and Hellenic Post (ELTA).

EAV has had negative equity for the past three years and is moving beyond budgetary targets, but no correction measures have been taken.

Larco, which sells nickel at below cost and survives by failing to pay Public Power Corporation (PPC), has a debt of 600 million euros that is rising each month by 5.5 million euros. These figures are based on estimates since Larco has not published a balance sheet since 2014. 

ELTA’s debts increase by 6 million euros each month, while the Skaramanga Shipyards and ELVO only have public procurement revenues and are looking for investors. 

A case in point is Larco, whose debts are to suppliers, banks and pension funds, while during the 2015-18 period it accumulated losses of 148 million euros. It employs 1,100 workers at an annual cost of 47 million euros. 

The government has given Larco a 12-month deadline (with a six-month extension) for a solution, otherwise it will be declared bankrupt according to an amendment tabled in Parliament yesterday.

A large chunk of its debt – 350 million euros – is to PPC. Moreover, despite the call by the European Commission for Greece to take a stance on the illegal state subsidies to the company, it has failed to do so for two years. 

Equally ominous is that the company faces a fine of 49.5 million euros for failing to comply with greenhouse gas emission rules.

Regarding the Skaramanga Shipyards, the government yesterday tabled an amendment granting it exclusive rights to use the shore and necessary sea area for its operation.

The government is also moving to settle the issue regarding illegal constructions and other ownership issues within the shipyard facilities and will introduce a provision for a transitional fire protection framework.