TAIPED: Greece’s privatisation fund hits a bumpy road
– By Zoe Mavroudi. Additional reporting by Petros Papathanasiou
“The Troika is interested in collecting immediate revenue and nothing else.”
This statement comes not from the mouth of an opposition MP but from Anna Zoirou, a technocrat who was dropped abruptly last month from the board of directors of Greece’s privatisation fund, the Hellenic Republic Asset Development Fund – known by its Greek acronym, TAIPED.
In an interview with the daily Avgi newspaper, among other public outlets, and in a letter to Prime Minister Antonis Samaras, Zoirou described the fund’s willingness to say “yes to everything,” the leadership’s refusal to tape-record meetings (held in English, presumably to facilitate communication with its non-Greek members), its secrecy and lack of concern for the long term economic interests of the country.
Zoirou’s charges would be a glitch in an otherwise smooth and uninterrupted ride for the private fund assigned with the most extensive privatisation program ever implemented in an EU country, if two weeks earlier Samaras hadn’t received another letter, this time a letter of resignation by the man who instigated Zoirou’s dismissal: TAIPED director Takis Athanasopoulos.
Athanasopoulos resigned citing “personal dignity” after being named in a felony lawsuit against the former board of directors of Greece’s Public Power Corporation, DEH. Athanasopoulos is charged of negligence for participating in the 2007 commissioning of a power plant that allegedly cost DEH losses exceeding 100 million euros. He has already been replaced by Stelios Stavridis, another company-hopping Greek technocrat and former candidate for the neoliberal Drasi (Action) party, whose leader Stefanos Manos spearheaded along with Foreign Minister Yiannis Stournaras an NGO in support of privatisations as early as 2011.
Apart from his recent party connections however, Stavridis has himself a long past in the murky arena of privatisations. His name was embroiled in one of the biggest scandals in Greek politics, when in the early 1990s he oversaw the sale of the state owned (and profitable) AGET Iraklis cement company to an Italian cement producer, whose executives were reportedly later arrested for ties to the Cosa Nostra. The scandal saw former PM Konstantinos Mitsotakis accused of receiving millions in bribes to expedite the sale. Stavridis is making the jump from the helm of the Athens Water Company, EYDAP, one of the public companies set to be sold off by TAIPED. Ironically, he is also owner of a swimming-pool construction company.
For the time being, no irony, conflict of interest or scandal – old or new – seems to prompt Greek PM Samaras to rethink the role of TAIPED. The fund has been appointed with the sell-off, development or liquidation of a laundry list of assets and public infrastructure. They include public utility companies, motorways, airport terminals, ports and marinas, bank shares, islands and real estate abroad. Only last week, the Guardian reported the sale of the Greek consulate mansion in London’s glitzy Holland Park neighbourhood for £23.3 million, among other diplomatic buildings in Europe.
TAIPED was founded in July 2011 as part of the medium-term “mesoprothesmo” plan, the third round of self-defeating austerity passed in parliament under the then Papandreou socialist government. With a stated mission of restricting governmental intervention in the privatisation process, the fund operates under private law while its board claims absolute authority on final decisions.
A quick look at Law 3986/2011 under which the fund was created, shows that its role veers far off from independence from State influence into downright arbitrariness. This is described in a detailed report on Greek privatisations published by the radiobubble.gr journalism community.
All proceeds from the fund’s sales are bound to be transferred to a special account and only after payment of the fund’s operational expenses are met, including the hefty salaries of its members and advisors. As for the Greek public sector, it has legally withdrawn from any financial claim over revenues. More importantly, once an asset is transferred to the fund, the relevant law forbids its return to the State.
These unprecedented powers are now officially in the hands of the fund’s six board members comprised of Greek and Troika technocrats. Only two out of six members, the Chairman and CEO, are approved by a parliamentary committee. There are also two observers from the Eurozone and the European Commission and an international Council of Experts.
The make-up of the fund’s management was intended to reflect a consensus between the Greek government and the Troika on the privatisation front. But last month’s developments show that not all is quiet in the shores of the private island that is TAIPED, as rising tensions reflect the conflicting interests between local and foreign companies on who will get the largest piece of the Greek public property pie.
Zoirou’s dismissal came immediately after reports that the Hellenic Football Prognostics Organization, OPAP, has been threatened with a law suit for “non-transparent procedures” by two potential buyers over its announced plans to renew a contract with its IT provider Intralot. Zoirou – a personal recommendation to the fund by far-right party LAOS leader Giorgos Karatzaferis back in 2011 – slammed the decision to approve the renewal for being potentially binding to future buyers and said it came unexpectedly after a previous unanimous vote against it. Her request to release the board’s minutes to the public has not been satisfied as TAIPED fired back by accusing her of a breach of confidentiality.
OPAP is arguably the most significant asset on TAIPED’s plate but the fund has estimated that its value does not exceed 800 million euros even though revenues in the first quarter of 2012 alone, reached 258 million euros.
In a recent parliamentary question, opposition leader Alexis Tsipras attacked TAIPED’s overall value estimates of Greek public property claiming that the fund has brought the value of Greek assets down from 285 billion euro pre-crisis, to a mere 9,5 billion euro. Tsipras called on Samaras to cease its operation calling it “illegal” and “unconstitutional.”
After last month’s developments such calls are only expected to rise.
As 30,000 Greek homes get their electricity cut off each week, public infighting between the Greek political class, the usual suspects of Greek business and TAIPED’s technocrats adds insult to injury for many Greeks who oppose the fire-sale of their country’s assets. But in the Greece of Troika, neo-nazi MPs and unending austerity, these squabbles are less of an anomaly and increasingly, a stark reflection of a new phase in the crisis.