Greece is about to begin privatization of some of its biggest seaports. The government of this country announced that it would sell parts of its holdings in the seaports of Piraeus and Thessaloniki (Saloniki). The government is looking for investors with stakes in the operation of these seaports; the potential buyers would likely be among the companies that already are present in the management of these ports. Greece hopes to get at least $1 billion for its stakes in both seaports.

The workers and the unions in both ports, however, don't approve the idea of selling off. After many threats of strikes, they began a 3-day strike immediately after the New Year celebrations. Their main argument is purely economic, they think that the seaports are still very profitable, and with some additional (public!) investments they could be kept profitable for years ahead. On the other hand, they try to influence the public opinion by invoking the threat of inflation in the country. According to this logic, the state-run seaports keep the operational costs low, which is reflected into low consumer prices across the country (Greece like most other developed countries imports most of its consumer goods from low-cost producers). As a matter of fact, both seaports are really profitable, and the profits have recently gone up.

The government thinks differently on this issue. The privatization is intended to bring modernization to the seaports without the need of large governmental spending. Greece as a country within the Eurozone has to keep its public financing under strict control in order to satisfy the criteria for membership. That's why every time it has to make a decision between increasing the spending or finding private investors (best of all among those with stakes in the business for privatization), the government would likely opt for partial or total privatization. In the case of these two seaports, the expected benefit for the public finances is for at least $15 billion over the next 7 years, or approximately one third of the projected deficit in the state budget for the same period of time.

Greece in the past was among the worst students in the Eurozone. Without interruptions, between 2001 and 2005 it went on red regarding the main criteria of financial stability, including the public deficit running at more than 3 percent of the country's GDP. Even if the overall situation isn't as threatening as in Italy, the trends were alarming, as well as the relative dependence of Greece on EU financial aid that goes over 3 percent of the GDP. Without a 'right' to print money at will or to borrow money expecting high inflation to repay debts with worthless papers, Greece is now learning the hard way how to manage the public finances.

On the other hand, Greece is among the West European countries with strongest leftist political traditions. What will look certainly as sustainable financial policy elsewhere is largely perceived here as a rightwing attempt against the social rights of the people.

Greece country profile:

• Area: 131,940 sq km
• Population: 10.7 million (July 2007 est.)
• Population growth rate: 0.16% (2007 est.)
• Net migration rate: 2.34 migrant(s)/1,000 population (2007 est.)
• Life expectancy at birth: 79.38 years
• GDP real growth rate: 4.3% (2006 est.)
• GDP per capita: purchasing power parity $24,000 (2006 est.)
• Main trading partners: EU countries, Russia, Turkey, and the Unites States.
• Internet users: 3.8 million (2006)

(Source: CIA World Factbook 2007, Reuters)

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