Greece: A Country for Sale

Eleni Portaliou
Wayne Hall

Alexis Tsipras and his Syriza government have overseen privatizations at a scale unseen since German reunification.


The most persistent myth concerning Syriza’s capitulation to the troika is that it was a “forced choice.” To put it differently, “there was no alternative” to signing a third memorandum, given an extremely unfavorable balance of forces at a European and international level. This is the only seemingly rational argument Tsipras and his followers have been able to produce defending their actions.

The story, however, doesn’t end here. Alexis Tsipras didn’t just dismiss the alternatives proposed by nearly half his own party and lead his government to the most spectacular surrender ever perpetrated by a left-wing political force. He also agreed to stay in power to fully and faithfully implement the policies of his former adversaries.

As a consequence, to give credibility to this left version of the “there is no alternative” argument, more self-serving arguments are necessary. The main one is that “implementing all these new austerity measures goes against our will, and we do everything we can to attenuate their negative consequences.”

Those on the Left who still defend Syriza share this line of defense. Among them is the French philosopher Etienne Balibar who, in one of his recent articles, writes that although Tsipras was “forced to concede to the diktats of the Europeans,” he nevertheless “strives to ensure that this policy of austerity and expropriation of national wealth is the least unjust to those who have already suffered the most.”

But the reality of Syriza’s governance one year after signing the third memorandum is enough to refute this argument. The following article concentrates on one of the most important aspects of the ongoing experiment in the country: the imposition of a model of “accumulation by dispossession,” not to a country of the Global South or Eastern Europe but to a member of the eurozone since its creation and of the European Economic Community since the early 1980s. It demonstrates that far from alleviating what its predecessors had agreed to do, Tsipras and his government are actually implementing a selling-out of public assets at a scale unseen since German reunification.

The author of this text, Eleni Portaliou, is a widely respected figure of the Greek radical left. An architect and professor emeritus at the National Technical University of Athens, she has been a longstanding member of the Communist Party of Greece (Interior), a municipal councilor in Athens for several terms, and then a member a Syriza’s central committee, which she left in the summer of 2015. She has been a pioneer in urban movements and a leading campaigner against the privatization of Greek state assets.

— Stathis Kouvelakis

Privatization — the seizure of public property by private capital — is a central element of neoliberal globalization, routinely imposed not only by national governments but by supranational organizations like the International Monetary Fund, OECD, World Bank, European Central Bank (ECB), and European Commission.

Today, Greece is the epicenter of privatization. The third memorandum, signed by the Tsipras government in 2015, enabled the property of the Greek state to be given away through scandalous methods to multinational companies and other states.

The theft is not unusual. Privatization is one of the ironclad principles of neoliberal economic thinking, along with balanced budgets, independence of the ECB, prohibition of monetary financing of deficits, and close bonds with the financial markets. These principles have been constitutionally incorporated into the European edifice, codifying the appropriation and waste of public wealth, destroying human labor, and undermining the survival of our planet.

Public Property for Public Debt

In Greece bad things seem to happen in threes. The strategy of seizing public property in the country comes from three reversals of property relations imposed by the loan agreements and the subsequent passage of three memoranda.

First, banks were allocated to foreign investors at ridiculously low prices. In the process, the public sector, which had acquired the failing banks with taxpayers’ money and could have nationalized them, lost a key regulatory tool in the economy.

The bank privatization facilitated the seizure of private property of Greek businesses through the “red loans” and securities held by the banks. This was the second reversal. The seizure of businesses was justified as part of a plan to restructure and consolidate big enterprises so that they could change owners in the most advantageous way for the new proprietors.

Small and medium enterprise seizures came next, and included primary residences — a devastating loss for many farmers, self-employed people, and small businesses. Distress funds have already initiated purchases by the banks of non-performing loans.

The third fundamental reversal in the ownership regime concerns the seizure of public property for the purpose of servicing the alleged public debt. To understand this reversal it is first necessary to examine the validity of claims about the country’s public debt — the justification for confiscating public property.

What is the connection between privatization and the public debt?

In Europe, as in America, the real epicenter of the 2008–2010 crisis is the banking sector and in the public money lent to stave off its bankruptcy, leading countries like Greece into bankruptcy. Public debt is not the debt of societies. It is the debt of the global banking system, which collapsed because of the uncontrolled speculative movements of financial capital. The banking system has been supported with public money, keeping it alive during the crisis, and today it continues to operate exactly the same way that it did prior to the collapse.

The nature of this arrangment is not a secret. The Public Debt Parliamentary Truth (PDPT) commission (July 2015) characterized the debt as “illegitimate, odious, illegal.” It is also unsustainable, approaching €300 billion today.

According to the PDPT commission:

. . . [T]he non-sustainability of the Greek public debt has always been clearly known to international lenders, the Greek authorities and the systemic media. Nevertheless, in 2010 the Greek authorities, together with some governments of the European Union, conspired against the restructuring of public debt in order to protect financial institutions. The . . . media concealed the truth from the public, pretending that . . . the rescue involved Greece as a whole rather than just the banks . . . creating a narrative that aimed to represent the Greek population as somehow deserving mistreatment by the creditors.


The amount allocated through the 2010 and 2012 rescue (memorandum) programs was controlled from abroad through complex arrangements which excluded any financial autonomy. Lenders strictly dictated the allocation of loan funds for purposes of “rescue,” of which only a small portion, less than 10 percent, was directed to meet current public spending.

The Greek people are aware of this arrangement. Hence the protest slogan of the exceptionally large and militant mobilizations of 2010–12: “We don’t owe anything. We aren’t selling anything. We’re not paying.”


A sovereign state has the right to refuse the seizure of its key assets.

Michael Hudson, professor of economics at the University of Missouri and adviser to numerous governments, says:

no sovereign state may be deprived of its assets. It is not just a transgression against democracy; it amounts to a rejection of what is defined as a sovereign state under international law. So it is something more serious than an attack on democracy. It is an intra-European war.

The reality is a bit more complex. According to Councillor of State Maria Karamanof (and president of the Chamber of Environment and Sustainability), public real estate may be divided into three categories. The first includes property that is by its nature inextricably linked to fundamental public goals of national sovereignty and sustainable development (defense, security, essential elements of the natural and cultural environment, basic energy, and transport infrastructures, etc.).

The second category includes property that serves public goals that are integral to the modern social state and part of the infrastructure necessary for the provision of corresponding public services (hospitals, schools, public buildings, barracks, etc.)

The third category includes public real estate which is clearly private property of the public sector. Only this third category may, under certain conditions, be surrendered to private citizens, and always in accordance with procedures determined by the sovereign state, not by extraterritorial organizations such as, to an extent, the Hellenic Republic Asset Development Fund (HRADF) and, much more, the recently formed privatization superfund Hellenic Company of Assets and Participations, S. A. (HCAP) for seizure of the totality of public property, under the direct control and by direct decision of the European Central Bank and the European Commission (EC).

Moreover, management of the concession of the state assets whose allocation is constitutionally permissible is the exclusive responsibility of the state, in this case the Greek state. In relation to HRADF the eminent constitutional expert George Kasimatis has declared that,

the Fund for Denationalizing Private Property, whatever it is called, is an illegal and criminal institution because it violates national sovereignty in relation to management of public property and causes immeasurable economic damage to the state.

The First Wave of Privatizations

The illegal nature of the divestiture/seizure of public property in Greece has not stopped it from happening. Until recently the theft went through the Hellenic Republic Asset Development Fund (HRADF), which was legislated through Memorandum Law 3968/2011 with a view to having the product of its activity used exclusively for repayment of the country’s public debt.

Step by step an increasing number of public assets have come into the possession of HRADF: over thirty-five ports, over three thousand pieces of public real estate (among them the Hellinikon airport and the Asteras Vouliagmenis hotel, spas, camping areas, Xenia hotels, ministry buildings, public administration buildings, etc.) dozens of properties abroad, dozens of listed and non-listed monuments, national roads, forty airports, military installations, natural gas , the defense industry (Hellenic Defense Systems S. A., Hellenic Vehicle Industry S. A.), oil (Hellenic Petroleum), a host of beaches and foreshores that comprise tens of thousands of hectares, the water supply (EYDAP, EYATH), hundreds and thousands of hectares of land, wetlands, railways (TRAINOSE S. A., EESSTY S. A. [Greek Railway Rolling Stock Maintenance Company]), post offices (ELTA), and profit-making enterprises.

The divestitures through HRADF did not proceed with the speed desired by the so-called “institutions” of the eurozone prior to the advent of the Syriza-ANEL government. There were mobilizations, there was recourse to constitutional courts, and in many cases prosecutions were launched by the public prosecutors for economic crime.

The Green Light

The signing of the third memorandum in July 2015 unleashed a broader attack by the European “institutions.” And last month a new privatization superfund — HCAP — was approved. HCAP will be the fourth part of the law entitled “Urgent provisions for the implementation of the agreement for achieving fiscal goals and structural reforms and other provisions” (Articles 184-233). It does not belong to the public or the broader public sector, and the provisions concerning public companies do not apply to it, unless otherwise explicitly stated by this law.

HCAP operates according to the rules of the private economy and in the public interest, for specific purposes, which are defined as: first, repayment of the (alleged) public debt; and second, contribution to funds for the investment policy of the country, which is fully controlled by the European “institutions,” the European Stability Mechanism (ESM) and the European Commission. Half the company’s profits is allocated toward paying down the debt while the remaining profits are used for HCAP’s investments in accordance with the provisions set out in the articles of the law.

The lifespan of the company is set at ninety-nine years, despite initial estimates of thirty-five years. To put this in perspective, the lifespan of the HRADF was just six years. The European Union has effectively declared ownership over Greece’s future.

HCAP’s legal identity has also enabled it to incorporate other entities into itself as direct subsidiaries: the Financial Stability Fund (HFSF), the Hellenic Republic Public Asset Development Fund (HRPADF), the Public Properties Company (PPCo S. A.), the Public Holdings Company SA; the company is entitled to establish other subsidiaries as well to achieve its objectives.

All major assets of the state, a small part of which — above and beyond current concessions — was included in the HRADF, are transferred to the new company. As for the newly formed Public Holdings Company, it will own the remaining Greek state participation in the public enterprises and will manage this participation according to international best practices and the OECD Guidelines.

Public enterprises controlled by the Public Holdings Company are subject to adequate supervision in accordance with the rules of national and European legislation. On registration under the Public Holdings Company Statute, public enterprises’ shares are automatically transferred, without consideration, to this company. The ownership and possession of all movable and immovable assets belonging to the Greek state and managed by the Public Properties Company according to Law 2636/1998 are automatically transferred to HCAP, without consideration, with the sole exception of protected natural areas, to be directly managed by the newly formed company.

Supervising this amassing of public wealth will be a supervisory board with five members, three of whom are selected by the Greek state with the approval of the European Commission and the European Stability Mechanism and two members, including the chairman of the supervisory board, are selected by the European Union and the ESM, with the approval of the finance minister.

The superfund and its direct subsidiaries, excluding the FSF and HRADF, have wide leeway to exploit their new assets. They can sell them, or transfer any rights to private and joint stock companies, or sell the shares to third parties.

The labor relations and rights of people who work at these formerly public companies will also be thoroughly disrupted. HCAP and its direct subsidiaries may recruit staff under private law contracts of employment for a definite or indefinite time. They can also move workers around — forcibly transferring workers whose private-sector companies or companies’ shares are transferred to the company or one of its subsidiaries — or transfer employees from HCAP to its subsidiaries or between subsidiaries. Finally, the company is allowed to bring in any personnel from government or public entities or the public sector to work for it or its subsidiaries.

The wholesale surrender of Greek state assets to extraterritorial institutions through processes uncontrolled by any elected bodies took place virtually overnight, with the draft legislation released only two days in advance. The texts for the agreements were drawn up ad hoc by the “institutions” and ratified by Greek parliamentary lackeys.

Who Owns the Air?

The seizure of the country’s regional airports and the former Hellinikon Airport give a sense of the enormity of the theft currently taking place.

The divestiture of fourteen regional airports — in Thessaloniki, Corfu, Zakynthos, Aktion, Kavalla, Chania, Rhodes, Cos, Santorini, Mykonos, Mytilene, Skiathos, and Samos — is nearly complete, despite a significant protest movement in local communities and the illegal nature of the divestiture.

From the outset there are a host of legal questions. According to the Greek constitution it is illegal to cede these public airports. There is also a potential conflict of interest, because Lufthansa (which belongs to the German state) is a technical consultant for the Greek public sector and is also a participant in the consortium to which the airports are being ceded, violating EU and international regulations on transparency, impartiality, and free competition.

Moreover, the economic section of the agreement is scandalous. The consortium will make a one-off payment to the Greek state of €1,234 billion euros, which corresponds to three years of the state’s net income from the airports. If the €520 million is subtracted that has been given by the National Strategic Reference Framework (NSRF) for works at Thessaloniki and Chania, which the state is obliged to repay, then the sum to be disbursed finally comes to €714 million. The annual rental paid by Fraport for the fourteen airports is €0.023 billion, which corresponds to the annual turnover just of the state airport of Corfu.

In the forty years of the contract the consortium will earn over €22 billion and will restore to the state only €3.85 billion. If the divestiture of these economically robust airports goes ahead, since they buttress another eighteen economically weak airports, the state will be called upon to pay the cost of maintaining these eighteen, or else close them, with tragic consequences for local communities, particularly those in the islands.

An equally serious subject is the control of aviation and the tourist sector by German capital. Given the enormous concession of the Athens airport to Hochtief, the Greek state is going to lose planning capacity for air transport (servicing of local communities, political strengthening of specific regions, tourist development, etc.), which is a central pillar of the country’s ability to structure its economy.

The Federation of Associations of the Hellenic Civil Aviation Authority has presented a developmental plan for modernizing airports and augmenting the revenues they are able to generate. Their report is devastating: public assets are literally being given away while a viable alternative exists. But even if the price were advantageous, the concession should not be made. A state without assets loses its sovereignty. It becomes a protectorate, as Greece is today.

In the case of the public real estate of the former Hellinikon Airport and Agios Cosmas beach, there are serious issues of legality and constitutional order that were brought, through a nonjudicial communication, to the attention of Prime Minister Tsipras and Finance Minister Tsakalotos by forty citizens headed by Manolis Glezos and member of the European Parliament, Nikos Chountis.

The alleged “investment” in Hellinikon amounts to the confiscation of more than six million square meters of public land of immense ecological and economic value, through procedures that are both anti-constitutional and probably illegal.

Investigations have been launched by the Public Prosecutor for Economic Crime Ioannis Dragatsis into the low price for which the concession was obtained and a report on violations of European law is being examined by the Committee on Petitions.

The chosen investment company, Lamda Development, has acquired Greek surface rights for ninety-nine years and 30 percent undivided full ownership and possession. This is blatant appropriation of public property.

According to the Norman Foster plan accompanying the contract, a new enclosed private city of twenty-seven thousand inhabitants and covering between 3 and 3.6 million square meters will be created at Hellinikon. Included in the uses will be different types of residential development, tourist accommodations, a casino with ancillary facilities, office buildings, retail commercial premises, and huge department stores; buildings housing health and welfare services, private university complexes; other buildings serving educational, cultural, and sporting purposes.

This self-referential city provides a wide range of services but it isolates those who live in it, and operates antagonistically to the neighboring zones with economically active centers in the surrounding municipalities, creating extensive new zones with office space, department stores, etc. In effect it is a private city, with its public services and common-use functions funded by the Greek state.

The city is also a potential ecological disaster. The Attica Basin, already saturated with man-made structures, is in need of climate change adaptation, not more development, and there is already a huge real estate bubble in the coastal and other neighboring municipalities.

By virtue of some of its economically advantageous features, the new private city will attract consumers from among the resident population in the surrounding municipalities and all of the basin, further damaging the already contracting economic activity of Attica. The new office buildings, the malls, and other shops on the Vouliagmenis Avenue axis, along with the mass of residential construction in the Foster plan, will swamp the present-day real estate market, and may force existing companies into bankruptcy.

New low-paid and insecure jobs will be created on the ruins of small and medium-sized construction, commercial and tourist enterprises, salaried employment, self-employment, and supplementary income from rent. A huge construction site will be in operation for decades, creating a permanent burden on both the functions of the city and on the life of residents, not to mention the tourism sector. The land of Attica will be smothered under a massive layer of concrete.

Privatizing, Subsidizing

The appropriation of Hellinikon is taking place in the name of paying off the public debt but little money is finding its way into the black hole of €321 billion. According to the experts of the Technical Chamber, Hellinikon’s investment value is €3 billion, but only €576 million in present-day values is being disbursed.

According to two recent reports commissioned by the Public Prosecutor for Economic Crime Ioannis Dragatsis, the actual value of the property is four times higher than the amount paid and the price in present-day value to be paid by the investor company is at least two and a half times lower, on the basis of the present-day value of the property.

In any case the meager sum acquired will go towards paying off the debt. But the Greek government will be called upon directly to pay €134 million for relocation of the public services housed in the property, as well as the cost of moving Poseidonos Avenue underground and will, from the first day of creation of the new city, undertake the operation and maintenance of the open spaces and the park, the public planning projects and infrastructures, communal buildings and services, through institution of a special administrative body.

The Greek state is also ceding the Agios Kosmas Olympic Sailing Center and other Olympic facilities of high economic value. In other words the Greek state is being penalized by the “investment” which is to be implemented using not the private individual’s own resources but by borrowing from the same banks that refuse to provide liquidity to small and medium businesses.

Resisting the Sell-Off

The movements struggling against each individual case of seizure — particularly when it comes to basic utilities and assets of the state — face formidable challenges. Their opponents include the European “institutions” imposing neoliberal policies, the Syriza-ANEL government, the opposition, and the national oligarchy.

But the struggles are worth waging as part of a wider project of challenging and possibly overturning the memorandum commitments, regaining the country’s sovereignty, and restoring democratic institutions, which have been suspended through the institutional coup imposed by the eurozone and the euro.

Through these mobilizations two major issues have come to light: the abolition of democracy and the country’s sovereignty and the demand for cancellation — or at least a radical settlement — of the debt, in whose name, through loan agreements and memoranda, the assets both of the state and of Greek citizens are being confiscated.

There is, therefore, a broad social/political convergence on general objectives, which are fundamental preconditions for the survival of the country, for recovery of production, and for social reconstruction. The burden of “illegitimate, odious and illegal debt” is the key factor behind abolition of the autonomy of Greek democracy and decision-making, the factor that is reducing the country to the status of a protectorate, or what some call a “debt colony.”

Awareness of this reality and how it is affecting ordinary Greek people has the potential to fuel a social and political counter-movement. That is the formation we are fighting for.