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Friday, July 20, 2012

Greece Spiralling Downwards

Costas Mitropoulos, the chief executive of Greece's privatisation agency, resigned on July 19.
 
In an open letter to Finance Minister Yannis Stournaras he notes that the new government has not given him/the agency the support needed:
"In order to accelerate privatization and to carry out the projected result, the government must provide full support for the administration of the Hellenic Republic Asset Development Fund (HRADF), facilitate all actions, and promote privatization as planned. This will give a message of reliability, professionalism and commitment to those looking to invest in Greece. The newly elected government has not given the support needed... 

Instead, they have indirectly yet systematically reduced the prestige and credibility in the eyes of potential investors. 

Furthermore, no set date has been given to the Chairman of the Board to resume meetings and indeed accelerate the privatization program. 

In these conditions I can no longer work professionally and effectively in my role as CEO entrusted by the state in July 2011."
Given that privatisation is key rebuilding the Greek economy and to ensuring that it honours its bailout commitments, the lack of progress indicates that Greece will not meet its commitments and that the economy will continue to spiral downwards.

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