- Language Tips
'But program should not be seen as a source of cash to fill budget holes'
The Greek government is taking to China its plan to raise 50 billion euros ($64.74 billion) by privatizing some of its assets in a bid to attract "long-term investors", a Greek diplomat said on Thursday.
His remarks came amid widespread doubts concerning the government's ability to follow through with the plan, which may further postpone aid from coming to the country.
A group of high-ranking Greek officials will visit Shanghai on Nov 30 as part of a road show to promote the sale of the Greek assets, aiming to "dissipate negative impressions by presenting the true economic potential of Greece", said Evgenios Kalpyris, consul general of Greece in Shanghai.
The event will serve as an important opportunity for Chinese businessmen to receive "authoritative and updated information on investment opportunities in Greece, showcasing it as a truly attractive investment destination armed with a friendly legal framework", he said.
Kalpyris said the privatization plan should not be thought of as a potential source of cash to fill the holes in the budget. His government is instead looking for people who have the capital and who will be eager to help the Greek economy and make a profit along the way.
Until now, about 10 institutional investors, including large State-owned enterprises, leading financial institutions and prominent private enterprises have shown interest in the plan, according to Wang Yunfan, deputy editor-in-chief of 21st Century Business Herald.
According to figures from Invest in Greece, a government-initiated fund management agency, China's direct investment into Greece had increased to 1.2 million euros by 2010, up from just 100,000 euros a year ago. And room still exists for more to come in.
China has shown interest in Greek energy, tourism and, most notably, infrastructure such as ports and airports, a result in part of the fact that its location gives it easy access to the Balkans and Central Europe.
Kalpyris said he expects China's demand to become greater for investment in the technology, food and drinks, banking and real estate industries, all of which are teeming with opportunities.
Greece's privatization proposal is a large part of a broader plan put together by its international creditors to trim its massive debt burdens and attract investment into its recession-ravaged economy.
But as the government grapples to drum up interest from investors, it has reduced its privatization goals, saying it wants to raise about 11 billion euros by 2016, the Wall Street Journal reported on Wednesday.
Previously, it had planned to use privatization programs to raise 19 billion euros by that year.
The Greek parliament on Wednesday approved a proposal to allow greater flexibility in the privatization of the country's public utilities, providing further evidence that doubts exist about the larger privatization plan.
Kalpyris blamed the delay on two culprits: a series of elections that ended in June and bureaucracy.
"Privatization on this large scale is a whole new process that Greeks are engaged in for the first time," he said. "Privatization is in fact a learning process which is already by now on the move."
Even though the country's plans have yet to restore strong growth, economic data have revealed at least one reason for optimism: Greece's exports increased by 14 percent in the first six months of the year, Kalpyris noted.
Analysts, though, warned that the country may be faced with greater difficulties.
Under an austerity plan Greece is now subject to, it is required to reduce the amount of its sovereign debts to 120 percent of its GDP by 2020.
That amount is now almost 170 percent of the country's GDP and is likely to increase to nearly 180 percent by the end of 2013, said Dan Steinbock, research director of international business at the India, China and America Institute in the United States.
"After two years of muddling through, all investors should be weary," Steinbock said. "At the same time, no investor can ignore Europe, due to its strategic importance as a huge market, export destination and technology partner."
He said the debt crisis in Europe are moving into a new phase.
Foreign investors, especially the Chinese, should expect the European Commission - the executive body of the European Union - European Central Bank and International Monetary Fund to have a realistic plan for Greece.
"They should also prepare for the reality that the eurozone debt crisis will take years to resolve," he said.
"And they should focus on attractive, strategic and long-term investment targets."