Galery

1

A favourable combination between the internal state of Greece and the external environment can lead to a good result. We should not forget that Greece is not alone in this crisis. All countries of the eurozone periphery are currently entering the market in order to sell and to seek buyers. All of them have their own version of some kind of a privatization. The more realistic goals, as well as the creation of appropriate conditions, will make the privatization successful.

Some privatizations should have happened long before the beginning of the crisis. Then the prices at which the assets could have been sold might have been much higher than today's. But this did not happen and now we are paying the consequences.

Which are Greece's best cards in the privatization?

The old Athenian airport in the suburb of Hellinikon is an important asset which has a great potential for development and can create a new economic stimulus in the capital city. In addition, the state lotteries OPAP, the airports, the harbours and the rest of the assets in the list of the first privatizations are also good cards.

The only two airlines in Greece - Olympic Air and Aegean - are making a second attempt to merge. How do you envisage the development of this merger?

The two airlines are not the only ones operating in the Greek market. Therefore, the merger can be successful. Cyprus Air already has flights in Greece and their corporate strategy is to increase the number of flights in the country. This will reduce the objections of the European Competition Commission to authorize the merger of the two companies.

The first attempt to merge two years ago failed due to suspicions that it would create a monopoly. Today the situation is different, there are new players in the market and the financial crisis is providing conditions for the merger to be approved.

The banking sector is currently going through a major metamorphosis. Piraeus received billions of state aid in order to buy ATEbank for millions and it also took Geniki for one euro. Alpha bank acquired Emporiki bank, and now the merger between Eurobank and the National Bank of Greece is pending. How would you rate the transactions and mergers carried out so far?

The problem with the recapitalization and the aid to the Greek banks is huge. Both Greece and Europe are responsible for this problem, because of the way they created the plan for financial aid. Refinancing of banks is experiencing a dramatic delay.

The banking sector in Greece as a whole should be reduced, it has to shrink. During the last month and a half we have seen some actions in this direction. Surely, there will be more. I cannot give an evaluation of whether these actions have been performed correctly. The current situation is unique for the country. There are decisions which are met with a great discontent. On the other hand, these decisions show that something is starting to move, unlike the previous two years. The Greek financial sector should have shrunk a long time ago. However, measures in this direction are being taken only now. There will surely be criticism of the way the market is shrinking, regardless of the way the reform is performed. The management of a healthy banking sector is very difficult worldwide - regardless of the way it is done, there will always be criticism.

I can say that a consolidation of the banking sector in Greece should certainly take place. The sector proved to be too big for the country's economy and for the Balkans, where the Greek banks have agencies. Currently, the banks are unable to lend - which is their primary goal - and to finance the development of real economy. The financial market is shrinking and this will also reduce the number of the banks serving it.

A major part of the assistance tranche Greece is now expecting is aimed at the stabilization of the banking system. At the same time it is delayed because the government cannot agree on the final version of the fiscal consolidation measures associated with the aid. Does the funding of the Greek banks need to be separated from the general financial assistance to the country?

Officially, Europe is constantly changing its mind on this matter. At the summit of the leaders in Europe this summer it was decided that the banks will be funded directly by the permanent European Stability Mechanism (ESM). Two or three weeks ago, Germany, Austria, Finland and the Netherlands said that it can be used from now on, but not for the countries which are already using financial assistance from Europe, as is the case of Greece, Portugal and Ireland. Yet another change in the position followed, when Angela Merkel said that an exception could be made for the separation of the banking sector's funding from the general aid for Ireland.

Ultimately, it is now believed that Europe has no specific position on the matter. We see that if the markets start to seriously pressure one another, Europe may approach a separate funding only of the banks which are outside the macroeconomic rehabilitation programme of each country. On the other hand, if voters raise their voice against this, then the independent recapitalization of the banks will not happen.

It would be very good for Greece if the banks' recapitalization is separate from the implementation of the fiscal consolidation measures. Funding from the European Stability Mechanism (ESM) will bring significant relief to the external debt. But Europe has to decide on its official position on the matter first.