Publications

Greek Chapter to Euromoney's "Privatisation & Public Private Partnership" (Review 2002/2003).

GREECE

Dimitris E. Paraskevas

Elias Paraskevas Attorneys 1933

Despite the fact that Greece’s GDP growth is currently the highest in Europe, the country has witnessed a downturn in the economic and political climate over the past two years, partly due to the bursting of the Athens Stock Exchange bubble. No single company was privatised in its entirety. In 2001, the privatisation proceeds amounted to approximately €1.6bn, close to €1.7bn which were raised during 2000 (see Figures 1 & 2). Over the past two years, a total of 12 companies, six in each years, were partially privatised.

Introduction

The Minister of Economy has taken the complete burden of the privatisation programme upon himself and seems anxious to change the current state of affairs. He announced amendments to the privatisation framework (Law 2000/2001) and a number of proposed privatisations (see Figure 3).

The sale of shares in an amount of approximately €510m (representing 57.8% of the total share capital) in ETVA bank (March 2002) and the sale of 100% of the equity in HELLENIC SHIPYARDS SA to a consortium of the German yards HDW and Ferrostaall (a transaction which appears to be very close to closing at the time of writing), will hopefully serve to bring back momentum to the privatisation programme.

The outlook in the field of infrastructure seems more optimistic, with the introduction of a new legal framework on the Private Finance Initiative (PFI) about to be launched.

The Third European Union Support Framework has set aside a budget of approximately €50bn for Greece, 50% of which has been earmarked for investment in infrastructure projects; the €2bn new Athens International Airport has been fully operational since May 2001; the €1.3bn Athens ring road project is nearing completion and acts as an access road to the Airport; and the €600m Athens Light Metro project is due to finish in early 2004.

Of course, the upcoming 2004 Olympic Games have resulted to a boom in the construction sector throughout the country. A mood of optimism prevails as the country prepares itself to host the games.

The aim of this article is to briefly set out the legislative changes which have taken place in the privatisations in Greece.

Recent legislative changes in the laws governing privatisations

As mentioned, the legal framework governing privatisations is set out in Law 2000/91, as such law has been amended from time to time (for an analysis please see our contribution to the 2001/2002 edition of International Privatisation Review).

The most recent amendments, which have been introduced by way of Law 2919/2001, are summarised as follows:

Privatisation methods. Two new methods were introduced (Article 28, Para. 2). These are as follows:

(i) sale of the shares of the public undertaking to be privatised (the “Undertaking”) through the issuance and offer of exchangeable securities to investors in Greece and abroad;

(ii) interim sale of the shares of the Undertaking to Greek or foreign financial institutions, acting as intermediaries, until the final offer of the shares to investors further to the consent of the Greek State of the Undertaking.

(iii) amendments to the judicial procedures: The provisions of Article 5, Para. 3 of Law 2000/91, which stipulate that the Greek administrative courts are the only competent courts to rule on all contractual disputes arising fro the privatisation procedures, have been overruled by Article 28, Para 1.

As a result the law and jurisdiction clauses agreed to by the contracting parties will be upheld by the local courts, regardless of whether they provide for Greek or foreign jurisdiction.

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Legislative framework governing the private finance initiative

The legislative framework to govern the Private Finance Initiative (PFI) in Greece, has already been drafted by a legislative committee and is due to come before the Greek Parliament shortly.

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The Greek privatisation programme

Figures 1 & 2 enumerate the transactions concluded within the years 2000 and 2001.

Figure 2 does not include the total proceeds in the amount ca. €800m, resulting from the extension to the Second Generation Mobile Communications Licenses (GSM), as well as the Third Generation Mobile Communications Licenses (UMTS) and the Fixed Telecommunications Licenses, which were awarded to mobile and fixed telecommunication operators in 2001, as comparable data for the year 2000 were not available for inclusion. The Greek Government has announced the following privatisations for 2002 (see Figure 3).

Notes: ¹Excluding the proceeds of sales of telecommunications licences.

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