Greece sells telco stake as protests grow
PROTESTORS crowded into Athens’ Syntagma square outside parliament yesterday as the government announced that it is selling off a ten per cent stake in Hellenic Telecom.
The deal sees Deutsche Telekom, which is 30 per cent owned by the German government, buy the equity for $400m (£245m) as part of a €50bn (£45bn) Greek privatisation scheme.
The protests, which have been running for 12 days, swelled to at least 80,000 people yesterday as the cabinet met to discuss the latest round of cuts, which are expected to include €25bn worth of privatisations on top of those already announced and €22bn in budget cuts from 2012 to 2015.
In return, Greece is likely to get funding worth around €85bn from the troika – the IMF, the European Central Bank (ECB) and European Commission – though some estimates run higher.
But efforts to agree on the funding were dealt a blow yesterday as ratings agency Fitch warned that even a “voluntary” debt restructuring could constitute a sovereign default.
The troika has been scrambling to incorporate some form of private sector burden-sharing into the new bailout plan to spread the cost. But it is also anxious to avoid any action that could constitute a technical default.
Fitch said that even a consensual debt swap with Greek bondholders – whereby short-dated debt is exchanged for longer-dated notes – would count as a “restricted default” under certain conditions.
It said that if the new debt offered is “materially less advantageous to bondholders than the existing securities” and if the action “is, or appears to be, necessary to avoid insolvency and/or illiquidity”, it would rate the sovereign as having defaulted.
l Meanwhile, Portugal’s centre-right PSD party is locked in coalition talks after winning the largest share of the vote in Sunday’s elections. The PSD has said it will implement cuts in return for Lisbon’s €78bn bailout.