Privatization calls find Greece caught between creditors and voters

Maria Aroni isn’t entirely opposed to privatization, but she deems efforts by the Greek state to sell off public assets in order to pay down its debts as “a move of desperation.” And last spring, the businesswoman and former deputy mayor of the tiny island of Elafonissos helped lead a successful fight to prevent a soft-sand beach being sold off to hotel developers. 

“This island, as beautiful as it is, simply cannot survive if it’s cut off from Simos beach,” she explained. “This beach is the source of life financially, supporting all the small businesses on the island, and encouraging the kind of small-scale tourism that brings out the best of Greece, like its natural beauty, its hospitality.”

Aroni’s response — and the victory she and her neighbors won in the fight to block the sale of their beloved public beach to private interests — underscores a key dilemma facing Greece’s leftist Syriza government: Elected on a mandate to resist EU-imposed austerity measures, the government is under pressure to implement the wholesale privatization of public assets demanded by Athens’ creditors as the price for continued bailout funds.

To make palatable a policy inimical to its ideological orientation, Syriza has proposed to use the funds generated by privatizing state assets to finance welfare programs and the cash-strapped social security system. 

“It’s not a bad idea,” says Aroni, “but it’s an idea of dreamers.” She doesn’t want to reveal who she voted for, but is generally sympathetic toward the government. “I don’t think they can pull it off. I don’t think the Europeans, or the big companies backing European leaders, will let them do it.”

The European bankers who hold the fate of Athens’ liquidity in their hands expect the funds generated from privatization to pay down Greece’s debt. Analysts say talk of using it to fund social programs misses the point, and is emblematic of a haphazard approach to governing.

“If they spend that money for social policies then they’re going to have to find money elsewhere to pay the debt,” says Nick Malkoutzis, editor of Macropolis, an economic and political analysis site in Athens. “This adds to the general feeling that the government lacks a clear plan and is scrambling around to find the policies that will keep lenders abroad and voters at home satisfied.”

There’s also a tension within the Syriza party on privatization, says Giorgos Kyritsis, managing editor of the party-affiliated newspaper, Avgi. “Nobody in Syriza is in favor of privatization,” he says. “Many believe that privatization is done not just for money but for geopolitical reasons, like letting the Chinese into the port of Piraeus. That just doesn’t sit well with our party.”

A container facility in Piraeus run by the Chinese shipping giant Cosco was initially a focus of Syriza opposition, with ministers vowing to block or reverse privatization deals. But those statements were later retracted, amid confusing signals from a government that appears divided on the issue.

The EU and International Monetary Fund have balked at talk of Greece abandoning privatization, which was intended to generate desperately needed revenue — although since 2011, the program has raised only about 3 billion of the 22 billion-euro target it had been set.

Within Syriza, there are a range of views on the issue. Some members, like Mihalis Panayiotakis, accept that some assets will be privatized, but are digging in their heels over particular projects.  Panayiotakis wants to prevent the sale of Elliniko, the 6,200-acre site of the former Athens airport that’s been abandoned since 2001, and which activists who support Syriza have for years campaigned to turn into a park. “Elliniko is actually the last chance for us to have a large public park in the city,” he says. “I want us to fight for it.”

Lamda Development, a Greek company, won a bid last year to turn the land into a mixed-use development with a park, a sports center, shopping and housing that would bring tourists and jobs to Athens. But Environment and Energy Minister Panagiotis Lafazanis criticized the deal as “scandalous” and “anti-environmental.” And a Technical Chamber of Commerce of Greece report said the company paid less than market value for the land. 

The government says it wants to avoid “fire sales” of state assets, and some supporters are mollified by the promise to use revenues generated by privatization to fund social programs. “It’s much better policy than what was happening before,” says Panayiotakis. 

He’s still not sure, though, of what his government plans to privatize. “But what I know for sure is that Greek coastlines are off the table,” he says. “There’s no way we will sell or lease those.”

That’s welcome news in sunny, wind-swept Elafonissos, where retired sea captains play chaste love songs on their violins and Athenians like lawyer Leonidas Loukopoulos and his banker wife, Lilly Fotiou, vacation every year. “It’s a pathological idea, to sell the very thing that makes you money,” Loukopoulos said. “There are some things you have to fight for.”

Maria Aroni, a first cousin of the former deputy mayor Maria Aroni (nearly everyone on Elafonissos seems to have this last name), is an environmentalist who works in eco-tourism and also runs a small gift shop on the island. Her opposition to privatization is pragmatic rather than ideological. “I just don’t understand how it’s going to help us,” she says. “If we keep selling our possessions, but don’t change the way we run this country, what will sell next? Our bodies?”

She didn’t vote in the last election because she says she no longer believes any politicians can deliver on their promises. “The same problems are here, day in and day out,” she sighed. “If anybody tries to change anything, it will take time, and we just don’t have time. Sometimes, it feels like we are just spectators watching a great drama that is slowly killing us.”