By Aris Xenofos*
Greece is turning over a new leaf and the prospect of growth is taking root. Political certainty is now predominant in the internal market, following a period of doubt during the 1st – 2nd quarter of 2019, due to the three upcoming election campaigns at that time. The improvement of key macroeconomic indicators, the restoration of confidence in the Greek banking system with the complete removal of capital controls, the positive results in the capital market and money market with the Athens Stock Exchange distancing itself at a point of risk from the behaviour of key European Stock Exchanges and the return on Greek bonds dipping to record lows during the last decade highlight the powerful momentum gradually regained by the Greek economy.
*Aris Xenofos is the executive chairman of the Hellenic Republic Asset Development Fund (TAIPED).
On this basis, the question inductively emerging concerns the “fuel” that will serve as catalyst for a sustainable, medium to long-term growth. Surely the answer is not one-dimensional. It is my belief, however, that in a country lacking significant, in range and scope, heavy industry, with significant losses from “brain drain” as well as from “brain waste”, attributed to the inability of domestic academic institutions and research centres to make the best of the innovative nature and resourcefulness of Greek minds, the attraction of foreign investment capital becomes a dominant quest. And this is due to the fact that boosting of domestic liquidity (which is currently limited) and the establishment of prospects for growth along with the attraction of foreign investment capital, form the foundation which shall render debt sustainability even more solid and the government policy mix even more growth-oriented.
In view of this challenge, the Hellenic Republic Asset Development Fund unquestionably plays a dominant role via a) a program for managing and utilizing public assets, which include infrastructure, energy and extensive real estate property and b) via the gradual shift of the organisation itself, from being a privatisation agency to being a tool for growth.
Through a conscious choice to move in the direction of growth, the Hellenic Republic Asset Development Fund both plans and carries out tenders, setting two main terms to potential investors: carrying out an obligatory investment plan and leaving a positive imprint on society.
Here are some notable cases in which the participation of the Hellenic Republic Asset Development Fund has been determinant. Regarding Piraeus Port Authority S.A. the participation of the Hellenic Republic Asset Development Fund has been decisively creative in the finalisation of the master plan; as a result, the initial mandatory investments of 350 million euros provided for, arose to the amount of 800 million euros. The same applies to all 14 regional airports, for which the total price of concession approaches 10 billion euros. In the event of the Hellenic Gas Transmission System Operator S.A. (DESFA), the ten-year development plan of 2020-2029 provides for investments of over 525 million euros. Additionally, the extension of the concession contract for the Athens International Airport is estimated to unfold a ten-year investment plan amounting to approximately 3 billion euros, while at the site of North and South Afantou in the island of Rhodes, the building and redevelopment projects are expected to exceed 500 million euros.
Even from a social point of view, the Hellenic Republic Asset Development Fund can demonstrate similar achievements. Indicatively, the provision of free access to the citizens of Thessaloniki to the recreational areas of the Thessaloniki Port Authority, as well as the positive part played by the Fund in signing collective agreements at the Piraeus Port Authority S.A. and at the Hellenic Company for Rolling Stock Maintenance S.A., just before its privatisation.
From its foundation in 2011 and until this day, the Hellenic Republic Asset Development Fund has utilised Hellenic Republic assets of 8 billion euros worth, with the overall spread effect for the economy exceeding 20 billion. Such performance ― which was no easy feat ― was based and continues to be based on experience and knowledge accumulated by the Fund over the years, as well as on a system of principles defining the framework of managing State assets: the principle of transparency via the planning of open and clearly formulated tendering rules, the implementation of the optimal corporate governance principles during the approval procedure of a tenderer, the provision of quality services both before and after the completion of a tendering procedure, maturing each asset both license-wise and business-wise and supporting the investors, in order for them to unfold their growth plan with greater ease and efficiency, acting as a bridge between themselves and the administrative officials of the State. It was no chance event that the Hellenic Republic Asset Development Fund was awarded by four international publishing houses in 2018-19 (The European, International Investor, International Finance Magazine, and European CEO) as the best and most transparent programme of attracting foreign investors to Europe.
Greece is turning over a new leaf and the prospect for growth is taking root. This particular phrase as the opening phrase of my article was no random choice. It shows recognition of the painstaking effort of the past in helping the country out of the close supervision of institutions, but also the need for a new creative re-evaluation of the planning preceding it. A re-evaluation that will approach the management of public assets ― whether concerning financial securities (Hellenic State participation in banks) or public interest companies, real estate and infrastructures ― in a comprehensive and necessarily coordinating manner, by utilizing and safeguarding the experience of the past and by setting the basis which will allow for synergies between organisations, for European Structural Funds money to be absorbed and for attracting the “intelligent” investment funds of international markets (private equities, sovereign funds), which seek performance in an international climate of mounting uncertainty and negative interest rates.
