ECB Board Member Says Greece Can Raise $429 Billion Selling Assets; Greece’s Papandreou Vows to Press Austerity, Says Greece "Soon Out of the Woods"

ECB member Juergen Stark says Greece may raise up to 300 billion euros from selloffs.

The ailing euro zone state, whose debt burden stands at around 330 billion euros, currently aims to raise 50 billion euros from privatizations by 2015 to help stave off a fiscal meltdown.

"The Greek government has shares in listed companies, it owns real estate. Experts estimate the sales potential at up to 300 billion euros," Stark told the newspaper according to a prerelease from its Sunday edition.

"(Greece) needs to intensify its efforts," Stark also said. "(The privatization program) is meant to raise 50 billion euros by 2015 and one should be more ambitious here."

Greece’s Papandreou Vows to Press Austerity

In spite of stiff opposition, Greece’s Papandreou Vows to Press Austerity

Greek Prime Minister George Papandreou said he’ll press ahead with new austerity measures after failing to win backing from the main opposition parties as he races to keep bailout funds flowing and avoid default.

Antonis Samaras, leader of Greece’s biggest opposition party, New Democracy, rejected the plan at a meeting with Papandreou and other opposition leaders in Athens, saying his party wouldn’t be blackmailed. Papandreou said he will go ahead with the measures even while continuing to seek support and ruled out early elections.

“My determination is to continue with this program in a very determined and decisive way,” Papandreou said today at a press conference in Athens. Greece has achieved “impressive” targets and there are signs of improvement in the economy, he said, adding that the country will “soon be out of the woods” by following through with plans for fiscal adjustment, state- asset sales and development of government-owned real estate.

European Union officials have called for consensus on the package, which includes an additional 6 billion euros ($8.6 billion) of budget cuts and a plan to speed 50 billion euros of state-asset sales, before approving more aid that Greece needs to avoid default. The wage cuts and tax increases Papandreou has imposed under a 110 billion-euro bailout last year have prompted strikes and protests, complicating efforts for compromise on the new plan.

Out of the Woods?

If Greece has a debt of 330 billion euros but can get rid of 300 billion euros of it by selling assets, then why does Greece need more aid? Has Greece all of a sudden turned a solvency problem back into a liquidity problem?

Color me skeptical.

If it was so easy, why hasn't it been done? I sense a bazooka bluff statement from Stark hoping to buy more time.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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