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Greece to break up state power company for money - ASHARQ AL-AWSAT English Archive
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Workers take down the insignia from the headquarters of Cyprus’ now defunct second-largest bank Laiki in capital Nicosia, Cyprus, Wednesday, May 15, 2013. Source: AP Photo/Philippos Christou

Workers take down the insignia from the headquarters of Cyprus’ now defunct second-largest bank Laiki in capital Nicosia, Cyprus, Wednesday, May 15, 2013. Source: AP Photo/Philippos Christou

Athens, AP—Greece’s conservative-led government on Wednesday announced plans to break up the state-run Public Power Corporation by 2016, as part of a privatization program demanded by the crisis-hit country’s creditors.

Government spokesman Simos Kedikoglou said that about 30% of PPC’s resources would be spun off to create a rival company, while the company-owned transmission operator, Admie, would also be sold.

The government is planning to sell off a 17% stake of PPC after the breakup, leaving it with 34% of company and powers to veto decisions, Kedikoglou said. It will also retain a minority stake in the transmission operator.

“Careful consideration will be made for staff. There will be no dismissals,” Kedikoglou told state-run NET television, insisting the privatization plan had the full backing of the government’s left-wing and center-left coalition partners.

PPC employs about 20,000 people.

The main left-wing opposition party, Syriza, described the proposed sale as “looting,” while a PPC union representing power station workers and lignite miners in northern Greece said it would do “everything in its power to block the sale.”

Shares in PPC rose 7.5% in Athens on Wednesday, with investors also buoyed by a sovereign rating upgrade by Fitch late on Tuesday. The main Athens index closed up 3.7%.

Greece’s rescue lenders—its euro partners and the International Monetary Fund—have been pushing the government to speed up its privatizations campaign, one of the conditions for the bailout loans it has been receiving since 2010.

The government has promised the economy will grow gain and the state will once again borrow from bond markets next year. Greece’s borrowing rates have improved steadily over the past year, with the interest rate on 10-year bonds falling from 30% in June, when the ruling coalition was formed, to just over 9%.

But austerity measures continue to hammer the economy. The Greek Statistical Authority reported Wednesday that economic output shrank 5.3% in the first quarter compared with a year earlier.

Rescue lenders are also demanding faster progress in dismantling market licensing restrictions and are pressing for the mass dismissal of civil servants—triggering a new round of strikes this month.

On Wednesday, high school teachers’ union members met to vote on whether to defy an emergency government order that would prevent them from holding rolling strikes from Friday. Teachers risk arrest if they press ahead with the strike, which would severely disrupt annual university entrance exams.

In central Athens, striking farmer’s market vendors handed out fruit and vegetables for free to hundreds of consumers. On Thursday, air traffic controllers plan to ground all flights for four hours from midday.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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