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February 16, 2015

New Greek Government reviewing airport lease deal with Fraport and Copelouzos

With the installation of a new Greek government has come a substantial amount of financial juggling regarding the previous government’s efforts to reduce the country’s debt. One of the major problems facing the Greek economy was the failure to reduce the debt from unpaid taxes, a figure which back in 2013 and the cause of much of the nation’s problems had reached €40bn, with a further €18bn owed in police fines and non-repayment of government subsidized loans.
Under the previous government a 40-year lease had been agreed in principal for Germany’s Fraport, in conjunction with Greek energy firm Copelouzos, to run 14 of the country’s airports, including Rhodes, Crete and Corfu. The leasing deal was set at a figure of €1.2bn, with the anticipation that €330m would be spent over the next four years upgrading the facilities. The deal was expected to be sealed by the end of October.
However the privatization of state-owned property was seen as a ‘crime’ and the new government has decided to review not only this agreement, but also any other privatization contracts that had recently been signed. State Minister Alekos Flabouraris made the current situation abundantly clear when talking on television: “”The deal has not been sealed. We said it will be halted and we will review it. For us, airports are not a package to be sold, like the others did. Some of them can be run by the municipality, others by private individuals, we’ll see.”
At the time of writing Greece’s Finance Minister Yanis Varoufakis is attending the Eurogroup meeting at the EU Council building in Brussels where the terms of the EU and EMF bailout are high on the agenda. The new Greek government are keen to renegotiate the terms of the original agreement, but part of the current bailout agreement payments depend wholly on Greece continuing to meet the previously agreed terms.



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