Last week’s end without a deal in Greece’s long-running effort to sell a 66 stake of DESFA, the natural gas grid operator, has tempted government officials to reconsider the privatization plans offering stakes in the energy firms PPC (Public Power Corporation), ELPE (Hellenic Petroleum) and DEPA (Public Gas Corporation).
Party officials at leftist Syriza, the coalition’s leader, have never really fully embraced the bailout-linked plans to privatize energy firms and would much prefer solutions retaining 51 percent stakes for the Greek State.
Since last week’s demise of the DESFA sale attempt, government officials have focused their intentions on a relaunch that would offer a minority stake of the operator. The DESFA sale collapse is sure to delay the sales of DEPA (65%) and ELPE (35%).
The effort to privatize DEPA would previously require finalization of the sale of any stake in DESFA, currently a wholly owned DEPA subsidiary. This would allow the seller and any prospective DEPA buyers to know exactly what is being sold. The same goes for the Greek State’s stake in ELPE, which, in turn, holds a 35 percent stake in DESFA. The state’s share in ELPE would be expected to be placed for sale once the DEPA privatization has been completed.
The subsequent delays of the DEPA and ELPE sales, combined with a series of obstacles in the bailout’s unfinished second review, have offered Greek officials time to reconsider the country’s energy-sector privatization plans.
Questions concerning the national energy policy that needs to be pursued, the country’s strategic direction, and how the Greek State could maintain control over networks and pivotal firms are some of the issues preoccupying the minds of Greek government officials.
Given the country’s bailout requirements, the actualization of such thoughts cannot be taken for granted. Greek government officials know well that the country’s creditors would not easily allow the already-endorsed privatizations program to be dismantled. The creditors have already voiced strong objections to any changes.
The creditors expect a total of 2.2 billion euros to be raised through Greece’s privatizations agenda in 2018.
Whatever the outcome, the Greek government has certainly gained additional time for the DESFA sale and other energy-sector firms, which can be regarded as a success in itself. If the country is led to early elections in 2017, then the hot potato of an issue will need to handled by the next government.