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Greece debt: Government sees hope in privatization despite protests

Officials see privatization as a way to dig out of Greece's debt, but newly unemployed workers are taking to the streets of Athens in protest. Tuesday's 10,000-strong demonstration may foreshadow larger protests to come, some say.

By Iason AthanasiadisCorrespondent / June 29, 2010

Greece debt: Protesters of communist-party-backed labor union rally in Athens on June 17, a day after the government unveiled a draft presidential decree making it easier for companies to fire workers by raising the number of layoffs allowed and enabling lower compensation payments.

Evi Zoupanou/AP


Athens, Greece

Kleanthis Tratras was among 10,000 Greek protesters Tuesday in the fifth general strike this year against government spending cuts. He, like many of the protesters, has found himself unemployed because of the government's privatization of state companies to raise money.

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The heavily indebted Greek government has adopted the International Monetary Fund's recommendation to raise some of the €320 billion ($390 billion) it owes foreign lenders through privatization. And that has transformed central Athens into a stage for daily demonstrations, even in the heat of summer when many here typically take long vacations.

While Tuesday's demonstration was smaller than past protests this year, strikes are expected to pick up again when vacationers return from the beach.

IN PICTURES: Top 10 things Greece could sell

That spells trouble unless the government can convince people like Mr. Tratras that privatization is essential along the country's road to economic recovery.

His former employer, the national air carrier Olympic Airways, was privatized in September 2009. As the new owner attempted to trim costs, it also decided in March to cut 4,400 workers, including Tratras. Months later, he and other former workers have yet to receive any compensation or pension payments, despite legislation that ordered their pensions be paid.

“We’re living through a waking nightmare,” says Tratras, who also demonstrated during protests in March soon after he was laid off. He worked for Olympic Airways for 30 years. Now, he is having to face the fact of a pledged compensation going unfulfilled even while hiding from his family exactly how dire their financial straits are.

“I have two children in college who need €2,000 ($2,400) a month," he says. "What can I ask them to do? Leave university?”

China to the rescue?

Privatization continues at a rapid pace. The government hopes to raise another €3 billion ($3.7 billion) through another round of state sales that will privatize public utilities and lease airports, seaports, railways, and highways to private firms for fixed periods of up to 40 years. The government is currently looking for bidders and has given few details on the number of companies that will be sold or the number of state workers that will be laid off.

As Greece sells assets and looks to create a more business-friendly environment, foreign investors are expressing interest. Perhaps the most successful example of privatization came last October, when Chinese shipping company COSCO started running one of the docks in Athens’s Pireaus port, the largest in southeastern Europe, on a 35-year, €3.4 billion ($4.1 billion) concession. The dock was formerly operated by the state port authority.

Sections of the Greek media hailed COSCO a redeemer for the Greek economy. “The Yuan Will Save Us,” ran one business newspaper’s headline.