Privatisations Will Not Make Any Difference In Greece

Despite the claims of the IMF, the EU, the World Bank, Analysts, talking heads on the TV.

Reading and watching the main stream news you would think the Greece privatising OPAP the bookmaker, DEI the electricity company, OTE the phone company that all Greece’s problems will be solved.

Nothing and I mean nothing could be further from the truth. To put it into some perspective the companies in which the state has a stake in lost 33.4million euros in the first month of 2011.

The Greek government’s deficit is 2.5billion euros a month or around 10% of GDP.

So to crystalies the point, as a percentage of the total government deficit, the state owned companies make up 0.01% of the government deficit. And this is all the state owned companies.

Trust me, it will not make any difference to the crisis if these businesses are sold off.

Of course the government could go further, and simply close the biggest loss making companies or simply sell their stake and the losses would be even less, may be the government would even make money from the state owned companies.

If the politicians were taking a long term view to the health of Greece they would not be selling off the jewels of the country.