BUSINESS
05/28/2011 12:09 pm ET | Updated Jul 28, 2011

Greece Could Raise 300B Euros By Selling State Assets: ECB Official

ATHENS/BERLIN (Angeliki Koutantou and Annika Breidthardt) - Greece could raise up to six times more than planned by selling state assets, an ECB policymaker said, as the country's leader renewed efforts to forge a political consensus on new austerity measures.

Echoing earlier views from the IMF, European Central Bank Board member Juergen Stark said on Saturday that Greece's privatization program was nowhere near ambitious enough.

The program -- part of a broader package of fiscal reforms to help stave off fiscal meltdown -- is intended to raise 50 billion euros by 2015

"The Greek government has shares in listed companies, it owns real estate. Experts estimate the sales potential (from privatizations) at up to 300 billion euros ($429.5 billion)," Stark told German newspaper Welt am Sonntag.

The ailing euro zone state, whose debt burden stands at around 330 billion euros, needs to garner support from opposition parties for fiscal reforms before the European Union and International Monetary Fund will free up more payments from a bailout package.

EU officials have asked Athens to step up privatizations urgently and suggested setting up a trustee institution to help oversee the process, similar to the body that privatized East German companies after the fall of communism.

But the EU has not asked to play a major role in the asset sales and is only offering its expertise, Finance Minister George Papaconstantinou said on Saturday [ID:nLDE74R01U]

Stark, who also reiterated ECB opposition to any form of Greek debt restructuring, echoed the IMF in his comments on asset sales.

The fund's European department director, Antonio Borges, said earlier this month the 50 billion euros cited as a figure for proceeds represented "probably less than 20 percent of all the assets the Greeks could privatize.

"A part of these assets must be mobilized to lower the debt level. Furthermore, privatizations cause more efficiency in the entire economy," Stark was quoted as saying on Saturday.

STILL SEEKING CONSENSUS

Greek Prime Minister George Papandreou on Friday failed to broker a consensus for the government's austerity program and reforms, including privatization, across various political parties.

On Saturday, he said there was still common ground with opposition parties on austerity policies and he hoped they would respond to his call for consensus on the way ahead.

"I believe there are several points we converge on," he told reporters, a day after opposition parties rejected his call for backing. "I will not stop seeking consensus. I hope several political forces respond so that we help ourselves exit this crisis in a faster and stronger way."

The opposition has rejected proposed tax increases to help reduce the budget deficit, arguing instead for tax cuts to revive economic growth.

The IMF has said it cannot release its part of a 12 billion euro aid tranche to Greece next month unless European partners guarantee they will meet Greece' funding needs for the next 12 months, something Germany and other north European creditors are unwilling to do without major Greek concessions.

(Writing by Annika Breidthardt; Editing by John Stonestreet)

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