The coast at Afandou is part of the Greek government's desperate attempts to raise money by privatising its vast portfolio of state-owned assets. Photo: ALAMYGreece's great fire sale
From pristine beaches to palaces, entire islands and its London embassy, a nation in crisis is selling its assets, writes Harriet Alexander.
By Harriet Alexander, Rhodes6:00PM BST 20 Apr 2013As George Georgas drives his golf buggy along the sea front, the sprightly 80-year-old muses on why this is the best stretch of coast in the world.
The beach is the longest on the Greek island of Rhodes – four miles of crystal waters, flanked by a gently sloping pebble shore. The 18-hole golf course that flanks it is lined with olive trees and wild flowers, and there is scarcely a hotel or high rise in sight.
Mr Georgas has played here for over 30 years. And now he thinks the government should sell it.
"We are like a bankrupt housewife forced to sell the silver, to save the family," he said. "Greece has no choice."
The sale of the coast at Afandou is part of the Greek government's desperate attempts to raise money by privatising its vast portfolio of state-owned assets – the largest firesale in history. Some 70,000 lots are for sale, ranging from pristine stretches of coast through to royal palaces, marinas, thermal baths, ski resorts and entire islands. Only last Wednesday, bidding closed for a stake in the state gambling company.
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On Monday Antonis Samaras, the prime minister, scraped through another round of negotiations with the Troika – the EU, IMF and European Central Bank – and managed to secure payment of the next EU 8.8 billion instalment of the bailout. But privatisation is a prerequisite for receiving the bailout funds.
On Rhodes, a mountainous island 50 miles long that was the mythical home of the sun god Apollo, huge chunks of prime real estate are now up for grabs. Beside the 1,850-hectare Afandou estate there is the peninsula of Prasonisi, a paradise for windsurfers, and the Mandraki marina in Rhodes Town, where the famous Colossus, a 100 foot high statue that was one of the seven wonders of the ancient world, once stood guard over the port entrance.
Rhodes is unique in having nearly a third of its land owned by the government, a legacy of being occupied during the Italian invasion in 1912 and later having ownership of that land passed over to Athens when it became part of the modern Greek state. Yet that hasn't stopped the inspectors from Athens fanning out across the country to see what else they could auction off.
The idea of snapping up a Greek island certainly has its appeal. In March the Emir of Qatar bought six for £7 million, while a Russian oligarch bought Skorpios – previously owned by the Onassis family – earlier this month for a reported £65 million, as a present for his 24-year-old daughter Ekaterina Rybolovlev. While both those sales were private, it showed there was a potentially lucrative market for chunks of scenic Greece.
To that end, the royal palace on Corfu, where Prince Philip was born, is now also for sale. So too is a large coastal estate which, the government boasts on its website, is next door to land owned by the Rothschild banking dynasty.
Officials refuse to discuss prices, saying that it depends on offers and the development proposals, but the Afandou coastline is looking for an investment of 150-250 million euros. The port of Poros, a pretty cobbled marina in southern Greece, is on the government books, as is the Athens police headquarters and the Ministry of Culture – a giant temple-like construction in the centre of the capital. So too are the buildings housing the ministries of health, education and justice. Even the Greek embassy in London's Holland Park: yours for £22 million.
However, not everyone supports the idea of so many places going under the hammer.
"We need to keep state ownership of all our assets – not sell them to the highest bidder," complained Yiannis Milios, chief economist for the opposition Syriza party, who would prefer to see more use of public-private partnerships, rather than sales.
"Experience shows that the privatisation of public goods is a very bad idea. With water, for instance, the quality falls but the price rises, which is totally wrong. The government is very good at finding legal formulas to work its way round supposed guarantees of public interest. It is not a good idea at all."
But others argue that Greece has no choice. Two bailouts from the European Union have failed to inject life into the economy, which has been in recession for the past six years. Unemployment is 27 per cent, and the deficit is forecast to grow to 189pc of GDP this year. Almost 1,000 jobs have been lost every day over the past three years in the private sector, and as part of Mr Samaras's deal made on Monday, 15,000 public sector workers are set to be made redundant as part of a Troika's programme for slimming the bloated public sector.
As well as political resistance, the other problem for privatisation programme is finding buyers. While the more picturesque islands might seem attractive busy, the same cannot be said of vast, loss-making behemoths like the Hellenic Railways Network and the Public Power Corporation. Both have militant unions that have vowed to fight privatisation tooth and nail, making them highly risky prospects for investors.
That partly explains why Greece has only raised about EU2 billion from privatisations since its first bailout loan in May 2010, missing its target of raising EU3 billion by last year. The country's longer-term aim of raising EU50 billion by 2019 has repeatedly been scaled back, and the best it now hopes for is to raise around EU 11 billion in privatisation proceeds by the end of 2016.
From his office overlooking the Mandraki marina in central Rhodes Town, Stathis Kousournas, mayor of Rhodes, sees no alternative.
"We want this investment – we actually fought for it to happen," he said. "We have to make sure that we are getting a fair price and respecting the environment, but those who have come to me with concerns are in the minority.
"It is not all being sold permanently – some of it is a long-term lease. We're all anxious to make the best of this – it is a development for all of us.".
Unemployment on the island is low compared to the mainland, averaging 17 per cent over the year thanks to the influx of tourists. But life is still hard.
Maria Karabini, a 40-year-old civil servant, has seen her salary drop by half over the past three years. Now, after paying her mortgage, she only has EU200 a month to live on.
"This sale of the land must happen," she said. "We need this now, quickly. Tell the Russians and the Qataris to hurry up!"
Across the island, almost everyone seems to embrace the proposals, so desperate are they for relief from austerity measures, although Lucas Georgas, a Bath University-educated businessman, sounded a note of caution.
"What I don't like is the 'sale' aspect of it," he said. "I would like to see the government renting it out for 20, 30, 40 years so that the business venture can make a profit, then return ownership to the state. This land does not belong to my generation to sell it."
In Athens, though, the man with the task of directing the firesale is convinced that there is no other way.
Stelios Stavridis, chairman of the Hellenic Republic Asset Development Fund, has only been in the job for three weeks – his predecessor resigned, reportedly before he could be sacked, over the slow pace of sales.
"I'm an entrepreneur, not a politician, and I have been screaming my head off that this is all about growth, job creation, wealth creation," said Mr Stavridis. "I am the anti-bureaucracy man: we need to bring in this money – there is no other way."
In Mr Stavridis's office in central Athens, not far from the parliament, a pair of American businessmen discuss in hushed tones their negotiating position. A ticker tape flickers above the head of the receptionist, detailing the latest hot offers: Afandou, Corfu lands, the disused Athens airport.
"We have been acting so stupidly for years, making rules against our own interest," Mr Stavridis added. "Being state-owned and well run is a contradiction in terms."
For those who do take the plunge, there are still myriad hurdles to overcome, despite the efforts of Mr Stavridis's team. Land registry is patchy at best, while investors must also promise to commit their own equity, but many foreign banks are wary of lending to Greek projects. Greece would appear to be only acting now because the Troika has forced its hand.
Back in Afandou, Vassilis Anastasiou, the manager of the golf course for the last 30 years, looks out every day on concrete proof of the "stupidity" of previous government programmes.
A grand breeze block clubhouse looms over the golf course; completed in 1973 and, strangled by bureaucracy, empty ever since.
"At least under the military junta it only took three years to build that site," said Mr Anastasiou. "Governments since would have taken 50 years to do the same."
His club has around 100 members, paying EU400 a year and with 60 of them playing regularly. But he is adamant that the land must be privatised – even if it means increasing the fees.
"Anyone who argues against it is either an idiot, or a state employee who doesn't think about economic reality and just likes to lounge on the beach," he said. "We have our heads in the noose."
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mrgombean
Today 06:10 PM
it would appear that the uropigs want their cake and eat it ,when you are bankrupt you are not driving the bus, if you want cash you sell what you own , its capitalism you see not difficult to understand, its also remarkable the most corrupt depraved greedy PIGS are in the most difficulty and are resisting reform all the way in the vague hope that a magic carpet can be found to cover over the cesspoole ,sadly this is just the beginning of a long road in the urofantasyland of funny munny
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Quinx
Today 06:05 PM
Stupid. Quit the EZ and reinstate the drachma.
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kevinlynch
Today 05:29 PM
I see they are taking the advice of Bild when that German rag crassly admonished "sell your islands, you lazy Greeks!" While I frequently find crude national stereotypes somewhat amusing, I couldn't help but wonder whether the fat sausage-munching readership (in the broadest sense) of Bild could even locate Greece on a map, such is their level of ignorance/stupidity.
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Gleaner1
Today 04:30 PM
For those who are curious about Disqus and their willingness to keep censoring honest debate, Google this:-
Bare Naked Islam.
Pat Condell explains all.
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lex772
Today 02:28 PM
Put me down for a well stocked Isle of Lesbos!
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Susanna Szonyi
Today 02:21 PM
I want a nice little island there! One of the problems (besides my limited “resource”) is that I am afraid of that it will be social unrest soon. Greeks are prone to it if they feel taken advantage of. A socialist even communist uprising is not a utopian scenario.
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epahtos
Today 01:43 PM
witichis, kindly note some things. Athens international Airport cost was around 17 billion euros. Germans brided Greek officials with around 1-2 billion euros, which is the actual cost around. All those billions went to German pockets, and there are a lot of evidence of that, so thats why Germans are not giving the names of those they bribed. And there are so many other projects done the same way. Everybody know in Greece that Germans are blackmailing the Greek officials. Either yu would do what we are saying, owise will spread the names all around. Greece being a beautiful country became very expensive last years. Now if yu hv to add the recent discovery of almost unlimited ''energy resources'' yu may ustand that the game is very big. Its a very big opportunity for someone has power to buy expensive things just for peaunuts. Yes on German reparations, will fight on that and we never abandoned that.
(Edited by author 7 hours ago)
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witichis
Today 02:00 PM
As I said, Germans are far from being innocent in this whole affair, yet all those things don't explain why your society and administration are "contaminated" with corruption. Aren't those Germans only a convenient scapegoat for you? How about some "self-criticism"? I don't want to be rude, but your state is in fact a mess, and neither the Germans nor the Turks nor little green men from Mars have anything to do with it.
Furthermore, if you don't like your corrupt politicians, may I remind you of the fact that the Greek people elected them and therefore share responsibility. Why did you give them your votes for decades? Send them to hell NOW and try to find some decent folk.
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octavia
Today 01:49 PM
So Germany pocketed around 17bn euros? Who then paid for the materials and the workforce and the know how? I don't think you have thought this through.
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VortexArchitect
Today 01:19 PM
Greeks seem to hate just about every country they border.
When the Greeks have problems with so many countries, you've got to wonder if that says more about the Greeks than it does about anyone else!
(Edited by author 8 hours ago)
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kchris
Today 07:41 PM
Just consider that there were wars in this area since the dawn of history. Of course Greece tried to expand in various occasions, but it was also conquered many times, because of the great geopolitical position. And war memories are hard to erase.
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scholiasticus
Today 05:10 PM
VortexArchitect : 'Greeks seem to hate just about every country they border. When the Greeks have problems with so many countries, you've got to
wonder if that says more about the Greeks than it does about anyone
else!'
Unlike you with the Greeks, apparently, Greeks have no problem with any neighbouring country as long as it respects international law (see Turkey's claims on Greek islands, casus belli against the expansion of Greek territorial waters, which is permitted by the International Law of the Sea etc), it has no irredentist intentions (see 'Macedonian' mythology) and does not consider its wealthier neighbour as a playground for illegal activities, e.g. armed robberies with AK-47, drug and weapon smuggling etc (Albania).
Above all Greece does not threaten anyone and does not claim anything; by contrast, is one of the most important investors in the Balkans and has offered financial aid and jobs to hundreds of thousands of Balkan citizens between 1990 and 2009.
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lex772
Today 02:40 PM
I can only go with the friendly, cordial manner they afforded me and my wife, during holidays to Crete and Zante, many years ago.
Can't fault the Greeks.
(Edited by author 6 hours ago)
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thrasher
Today 04:26 PM
Only because they depended on you for their living.
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octavia
Today 02:58 PM
--
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zagato
Today 01:10 PM
The idea that the Germans are good and selflessly helping everyone else out is propaganda. The Euro made them ultra competitive. Their culture and collective purpose and long term view are not easily copied. Germany benefitted hugely from Euro. The surplus funds were recycled carelessly by northern banks into the south. German companies used bribes, some of their banks collapsed. German wealth is held by the state, corporate sector and wealthy. On the whole Germans are much wealthier than Greeks. There is a big difference between the median and the mean. Germans have been known to misrepresent their intentions before. Best thing for Greece is to get out of Euro. Get tourism, food exports and small business going again. The Eurozone is finished. Either Germany leaves or it all blows up.
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octavia
Today 01:34 PM
The study about the private wealth of citizens in EU countries was put together by the ECB not Germany. In fact it was discredited within a day or two by Thomas Straubhaar, Director of the Institute for World Economies in Hamburg.
The link to the relevant report in Die Welt is (in German only):
http://www.welt.de/wirtschaft/...
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witichis
Today 01:17 PM
How could Germany leave? The Euro would implode within a week due to the lack of trust at the markets.
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thrasher
Today 04:26 PM
You mean as soon as Germany announced they were stopping supporting it.
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epahtos
Today 12:54 PM
The Greeks are not paying their taxes is a great myth. Its just a propaganda.
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octavia
Today 01:41 PM
Of course, workers who have their tax deducted at source do pay taxes, but how do you explain the many professionals like consultants living in big houses, with a second home by the sea, driving expensive cars and declaring an income of €10,000 p.a.? This was well advertised once the Troika started to look at the dusty files in some of the tax offices. And what about all the transactions without receipts? Tax evasion is money stolen from honest taxpayers.
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bluedog
Today 04:13 PM
Octavia
Most income tax returns are based on the principle of assessable income.
Being self-employed, most professionals will have allowable deductions from their gross revenues covering office or practice expenses. If a professional employs staff, these individuals would receive salaries on a PAYE basis. The tax payable by a professional's employees is therefore an effective tax on the same source of revenue as that generated by the professional. It follows that it is intellectually dishonest to blame professionals for failing to pay tax when they do in fact generate taxable income that is taxed but through different channels.
Of course, transactions with receipts or records are clear tax evasion.
Is your criticism just another example of Hunnish frightfulness?
(Edited by author 5 hours ago)
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octavia
Today 05:07 PM
Is your comment another example of ignorance of Greek practices?
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epahtos
Today 12:49 PM
We will survive as we have done through centuries. But, apart all we need justice. Justice means since our corrupted politicians are doing everything to save themselves we need assistance from Germany to tell us whom among our politicians they have paid in order get the huge projects prior to Athens Olympics. Would agree all of you, that in case of corruption, there is no difference btwn those ones who take and those ones who give. Big german companies and mainly Siemens gave billions of Euro to our corrupted politicians, with a view to great profit for themselves, and they keep their mouth shut. And not only that but the ex CEO of Siemens Greece, (whose father by the way was a trator during German Occupation in Greece during 2nd WW, Christoforakos), has escaped to Germany and lives there like a King and Germans refuse to deliver him to Greeks. Justice means Germans to pay for all their atrocities they hv done here during 2nd WW by killing even children and burning hundrends of villages. Greek people are desparately seeking for justice but in vain.
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dawnfromlondon
Today 01:44 PM
Germany benefited in the aftermath of WW2, via investment in industry, in a way that no other European country did - because the US and allies thought it would be foolish to replicate what happened after WW1 when Germany was left poor (leading it was thought to WW2).
It took Britain decades and millions of pounds to get back on its feet and the same is true for other European countries occupied by Germany and one can't help feeling irritated by the German mantra that their success is all down to their own hard work.
http://www.telegraph.co.uk/news/worldnews/europe/greece/10007606/Greeces-great-fire-sale.html#mm_hash