Desperate for cash, Greece is reportedly going to get an offer from Qatar to take over troubled Greek defense companies as part of a long-delayed massive privatization that could see the sell-off of major industries and assets.
Qatar’s interest in Greek defense industries is on the agenda when Prime Minister Antonis Samaras visits the Gulf State early next year. He had been set to go last month but postponed it to deal with his country’s crushing economic crisis and attend a critical meeting of Eurozone finance ministers.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) has been pushing the government to accelerate the pace of privatizations that have been set aside during the 2 ½ years Greece has imposed austerity measures and been getting emergency bailout loans.
Critics have also argued that the country would be selling its enterprises and lands far too cheaply as investors know the government is frantic to raise revenues to write down a staggering $430 billion in debt.
Among industries on the block are the struggling Hellenic Defense Systems (EAS) and Hellenic Vehicle Industry (ELVO) – are among the assets earmarked for privatization. EAS was formed in 2004 by the merger of Greek Power & Cartridge Company (PYRKAL), which for 140 years has made ammunition and now counts NATO as a customer, and Hellenic Arms Industry (EBO) which makes infantry weapons, mortars, weapon and missile systems, gun powder and aircraft payloads. ELVO makes armored fighting vehicles but has been unable to secure a government contract because of a lack of funding for defense purchases.
“Qatar is interested in a series of privatizations regarding the Greek defense industry,” Greek Defense Minister Panos Panagiotopoulos said in a statement after meeting Qatar’s Crown Prince Sheikh Tamim bin Hamad al-Thani in Doha. He added that Qatari officials believe that by the time Samaras visits that “the conditions will then be ripe for specific proposals and investment plans in our country.”
Other investment areas expected to be discussed include real estate projects such as the Hellenikon project, a 620-hectare development on Athens’ southern coast along the sea, an area that was supposed to be Europe’s largest park but has been set aside for development after sitting idle for a decade. Qatar Holding, the investment arm of Qatar’s sovereign wealth fund, is participating in the tender of this project.
Greece has promised the European Union and the International Monetary Fund it will raise 11 billion euros ($14 billion) from asset sales by the end of 2016, below its previous privatization revenue target for 19 billion euros by 2015.