A Roadmap to a New Greece

Prime Minister George Papandreou on April 15 unveiled a roadmap to get Greece out of the crisis, through the presentation of a three-year Medium-Term Fiscal Strategy for 2012-2015.

At the same time, he rejected increasing speculation of early general elections and restructuring of the Greek debt. "What we are presenting today goes beyond just the fiscal dimension. They are the basic points on a roadmap that will lead Greece out of the crisis and to a Greece that is creative," said the Premier, addressing a cabinet meeting and a meeting of his parliamentary group.

The Medium-Term Fiscal Strategy -the details of which will be announced after the Easter holiday- envisages fiscal measures together with an ambitious privatization plan aimed at raising € 26 billion by 2015. As Papandreou said, Greece's target is to reduce spending to 44% of gross domestic product by 2015 -from 53% in 2009- and to increase state revenues to 43% from 38% over the next four years.

Invest in Greece

Invest in Greece SA is the official Investment Promotion Agency of Greece that promotes and facilitates private investment. Invest in Greece is also responsible for the implementation of "Acceleration and transparency of implementation of Strategic Investments" law.

Invest in Greece identifies market opportunities and provides investors with assistance, analysis, advice, and aftercare support. It identifies potential partners, locates sites, assists in legal and licensing procedures, analyses investment proposals, furnishes pertinent economic information, and fully explains incentives available to investors.

Invest in Greece is committed to helping businesspeople discover the many opportunities in Greece, the gateway to Southeast Europe and the Eastern Mediterranean and to operate as a one-stop-shop for strategic investments.

Greece Announces Euro76b Package

The new €76b package of measures provides an opportunity for Greece to exit from the debt crisis, however there are several grey areas with underlying risks.

For the first time, Greek government presents a timeline of specific movements in the area of privatization and utilization of public property, planning to raise €2-4b in 2011 and €50b by 2015, accompanied by revenue measures of €26b, of with €3b will be raised in 2011.

1. Euro50b privatizations.

The government after a long debate whether public utilities (SOEs) should maintain a 'state' character, reached a compromise solution. Options vary from full privatization to maintain a 51% by the state. €10-15b will be raised through utilization of companies and infrastructure and the rest from other fees and property:

-Banks. Hellenic Republic will reduce its stake in ATEbank, after its capital increase and restructuring, however Greece will maintain a majority stake. The commercial department of Loan and Consignment Fund will be sold in 2012, while a decrease of public's stake in Hellenic Postbank is planned by 2013.

-Gambling. OPAP will be sold in 2012, after the extension of its concession contract. Regulation of the gaming (including e-gaming) market and issuing of licenses will be introduced in 2011. The privatization process for the State Lottery will start in 2011 Restructuring of Hellenic Horse Racing Corporation and initiation of privatization process in 2012

-Energy. In 2012, the State's equity holding in PPC will be reduced from 51% up to 34%, while the State will maintain control and interest. Reduction ofthe State's holding in Public Gas Corporation (DEPA) to 34% in 2011. LARCO (nickel mining company) will be sold in2011

-Telecommunications. Creation of a modern and wide fiber optic cable network with the collaboration of the public and private sectors. In 2011 the State will reduce its participation in the Hellenic Telecommunication Organization. The frequency spectrum and digital dividend will be utilized starting in 2012 in order to develop modern telecom, broadband and digital infrastructure. In 2011 the licenses for mobile telecommunications will be extended. The process for identifying a strategic investor in Hellenic Post who will take operational control of nationwide services will start in 2012.

-Airports. Extension of the duration of the concession agreement for Athens International Airport (?I?) in 2011 and gradual sale of state participation to private investors (2012). A new Law was passed by the Greek Parliament in March 2011 permitting the corporatization of the 29 regional airports. Corporatization of all regional airports starting in 2011 and attraction of private capital/know-how to upgrade operations while State maintains participation (similar structure to AI?).

-Ports. Studies are underway to explore viable public-private partnership structures to develop the Attiki Port System as well as the 12 regional ports of Greece.

-Highways. The operation, maintenance and toll rights for existing motorways will be assigned to private investors on a concession basis, be the approach for the Egnatia Odos Motorway the process will be completed by end of 2011.

A Special Purpose Vehicle with the rights to future toll revenues from motorways under construction or to be constructed will be setup and sold to private investors. This will reduce tolls during construction, facilitate the construction of roads currently underway and reduce debt.

-Railways. Implementation of the consolidation plan for the OSE Group so that it stops making losses and draining public funds. In 2011 the State's share in TRAINOSE will be divested and the development of the real estate assets of GAIAOSE will be initiated.

-Water Supply. State will maintain control of Water Supply companies, with trade sale to strategic investor.

-Real Estate Assets. Immediate development of State properties held by the Public Real Estate Corporation, Hellenic Tourism, and Hellenic Olympic Properties. Decisions on the zoning and building conditions for specific large State properties will be expedited to ensure faster development and utilization of these assets through the fast-track procedure. However, no other specific announcement was made.

2. Fiscal measures worth Euro26b.

Package of fiscal measures has several grey areas, most of them refer to the restraint of state spending and fighting tax evasion. Greek government is called for immediate measures, while the revenue-raising issue appears to be the country's main problem. However, even if these measures succeed, they require time to produce results (eg tax evasion).

-Streamlining the Public Wage Bill: Implementation of the 1:5 rule for hiring (1 hire for 5 withdrawals). Reduction in contractors hired by the public sector by at least 10% a year. Increase in working hours from 37.5 to 40 hours a week.

-Reduction in SSF expenditures and streamlining of other social spending. Reduction in the deficits of the supplementary Social Security Funds in order to safeguard their long-term sustainability. Establishment of a single organization responsible for the provision of social transfers, that will lower operational expenses significantly. Targeting of welfare benefits for the most vulnerable members of society.

-Enhancing tax compliance (€3.5b): Operational plan for tackling tax evasion. Increase in quantity and quality of targeted audits in enterprises and VAT. Enhanced quality of auditing of medium and large enterprises through the utilization of new information systems and methods. Identification of tax offences by individuals with large wealth assets. More effective receipt of arrears and fines owed to the State. Increase in tax revenues from income generated in Greece that has been transferred overseas. More effective taxation of real estate assets. More efficient tackling of smuggling/contraband.

-Reduction in Tax Exemptions (€2b): Elimination of tax exemptions that don't have a clear social or developmental rationale and benefit. Re-assessment of all exemptions on indirect and direct taxes. Use of social criteria to determine the height of the tax exemptions and discounts. Re-assessment of the taxes of third parties.

-Closure/Merger of Public Entities (€1.2b): Reduction in the number of police stations. Closure and merger of public entities overseas (embassies, consular departments, press offices etc). The new Education Map of the country will be used to identify the schools/institutes that can merge or close.

-Restructuring of State-Owned Enterprises (€2.4b): Intensification of the restructuring plans of OSE (rail transport organisation) and OASA (Athens city transportations) and focus on actions to increase revenues and revenues collection. New restructuring plans for other state-owned enterprises (e.g. public TV, EAV etc)

-Reduction in Operational Expenses (€2.5b): Reduction of all telecommunication expenses with Syzefxis. Rationalization of electricity expenses. Implementation of electronic procurement platform for all State purchases (e-procurement)

-Reduction in defence spending (€2b)

-Streamlining health expenditures (€1.2b): The new Health Map of the country will enable the Ministry of Health to identify hospitals that can be merged or closed. Reduction in the cost per patient per case with a number of cost-control measures

-Streamlining of Pharmaceutical Expenditures (€1.5b)

-Increase in Local Government revenue from their own resources (€0.6b)

World Market Overview Report 30/03/2011

In Athens, the ASE Composite sank 2% following the news. Shares of Piraeus Bank SA fell 5.8%, while National Bank of Greece SA tumbled 3.9%, and Alpha Bank SA fell 1.6%.

Greek-Russian Real Estate Event

The Hellenic Russian Chamber of Commerce and the Russian Real Estate Federation held a conference on New Opportunities for Russian Investors in the Greek real Estate Market.

Addressing the event, Deputy FM Kouvelis referred to the long-standing historic and cultural ties linking the two countries and the expanding economic cooperation and prospective.

The event was held under the auspices of the Foreign Ministry, the Russian embassy and Invest in Greece agency.