Roll up, get your piece of Greece

From pristine beaches to palaces, entire islands and its London embassy, a nation in crisis is selling its assets. Harriet Alexander reports from Rhodes.

Huge chunks of prime real estate on the island of Rhodes are on the auction block. Photo / Supplied
Huge chunks of prime real estate on the island of Rhodes are on the auction block. Photo / Supplied

As George Georgas drives his golf buggy along the seafront, the sprightly 80-year-old muses on why this is the best stretch of coast in the world.

The beach is the longest on the Greek island of Rhodes - more than 6km of crystal waters and a gently sloping pebble shore. The 18-hole golf course that flanks it is lined with olive trees and wild flowers, and there is scarcely a hotel or high-rise in sight.

Georgas has played here for more than 30 years. And now he thinks the Government should sell it.

"We are like a bankrupt housewife forced to sell the silver, to save the family," he said. "Greece has no choice."

The sale of the coast at Afandou is part of the Greek Government's desperate attempts to raise money by privatising its vast portfolio of state-owned assets - the largest fire-sale in history.

Around 70,000 lots are on offer, ranging from pristine stretches of coast through to royal palaces, marinas, thermal baths, ski resorts and entire islands.

Only last Wednesday, bidding closed for a stake in the state gambling company.

On Monday, Antonis Samaras, the prime minister, scraped through another round of negotiations with the Troika - the European Union, International Monetary Fund and European Central Bank - and managed to secure payment of the next €8.8 billion ($13.5 billion) instalment of the bail-out. But privatisation is a prerequisite for receiving the bail-out funds.

In Rhodes, a mountainous island 80km long that was the mythical home of the sun god Apollo, huge chunks of prime real estate are up for grabs. Beside the 1850ha Afandou estate there is the peninsula of Prasonisi, a paradise for windsurfers, and the Mandraki marina in Rhodes Town, where the Colossus - the 30m-high statue that was one of the seven wonders of the ancient world once stood guard over the port entrance.

Rhodes is unique in having nearly one third of its land owned by the Government, a legacy of being occupied during an Italian invasion in 1912 and later becoming part of the modern Greek state. Yet that has not stopped the inspectors from Athens fanning out across the country to see what else they could auction off.

The idea of snapping up a Greek island certainly has its appeal. In March the Emir of Qatar bought six for £7 million ($12.7 million), while Ekaterina Rybolovleva, the daughter of Russian oligarch Dmitry Rybolovlev, bought Skorpios this month for a reported £65 million. The island was once owned by the Onassis family.

While both those sales were private, it showed there was a potentially lucrative market for chunks of scenic Greece. To that end, the royal palace in Corfu, where the Duke of Edinburgh was born, is now also for sale.

So too is a large coastal estate which, the Government boasts on its website, is next door to land owned by the Rothschild banking dynasty.

Officials refuse to discuss prices, saying that it depends on offers and the development proposals, but the Afandou coastline is looking for an investment of €150 million to €250 million.

The port of Poros, a pretty cobbled marina in the south, is also on the government books, as is the Athens police headquarters and the Ministry of Culture - a giant temple-like construction in the centre of the capital.

So, too, are the buildings housing the ministries of health, education and justice. Even the Greek embassy in London's Holland Park could be yours for £22 million.

However, not everyone supports the idea of so many places going under the hammer.

"We need to keep state ownership of all our assets - not sell them to the highest bidder," complained Yiannis Milios, chief economist for the opposition Syriza party, who would prefer to see more use of public-private partnerships rather than sales.

"Experience shows that the privatisation of public goods is a very bad idea. With water, for instance, the quality falls but the price rises, which is totally wrong. The Government is very good at finding legal formulas to work its way round supposed guarantees of public interest. It is not a good idea at all."

Others argue that Greece has no choice. Two bail-outs from the EU have failed to inject life into the economy, which has been in recession for six years. Unemployment is 27 per cent, and the deficit is forecast to grow to 189 per cent of GDP this year.

Almost 1000 jobs have been lost every day over the past three years in the private sector and, under Samaras' deal made on Monday, 15,000 public sector workers are to be made redundant as part of a Troika programme for slimming the bloated public sector.

As well as political resistance, the other problem for the privatisation programme is finding buyers. While the more picturesque islands might seem attractive buys, the same cannot be said of vast, loss-making behemoths such as the Hellenic Railways Network and the Public Power Corporation. Both have militant unions that have pledged to fight privatisation tooth and nail, making them highly risky prospects for investors.

That partly explains why Greece has raised only about €2 billion from privatisations since its first bail-out loan in May 2010, missing its target of raising €3 billion by last year. The country's longer-term aim of raising €50 billion by 2019 has repeatedly been scaled back, and the best it now hopes for is to raise around €11 billion in privatisation proceeds by the end of 2016.

From his office overlooking the Mandraki marina in central Rhodes Town, Stathis Kousournas, mayor of Rhodes, sees no alternative.

"We want this investment - we actually fought for it to happen," he said. "We have to make sure that we are getting a fair price and respecting the environment, but those who have come to me with concerns are in the minority.

"It is not all being sold permanently - some of it is a long-term lease. We're all anxious to make the best of this - it is a development for all of us."

Unemployment in the island is low compared with the mainland, averaging 17 per cent over the year thanks to the influx of tourists. But life is still hard.

Maria Karabini, a 40-year-old civil servant, has seen her salary drop by half over the past three years. Now, after paying her mortgage, she has only €200 a month to live on. "This sale of the land must happen," she said. "We need this now, quickly. Tell the Russians and the Qataris to hurry up."

Across the island, almost everyone seems to embrace the proposals, so desperate are they for relief from austerity measures, although Lucas Georgas, a Bath University-educated businessman, sounded a note of caution.

"What I don't like is the 'sale' aspect of it," he said. "I would like to see the Government renting it out for 20, 30, 40 years so that the business venture can make a profit, then return ownership to the state. This land does not belong to my generation to sell."

In Athens, though, the man with the task of directing the fire-sale is convinced that there is no other way.

Stelios Stavridis, the chairman of the Hellenic Republic Asset Development Fund, has been in the job only three weeks - his predecessor resigned, reportedly before he could be sacked, over the slow pace of sales.

"I'm an entrepreneur, not a politician, and I have been screaming my head off that this is all about growth, job creation, wealth creation," said Stavridis. "I am the anti-bureaucracy man: we need to bring in this money - there is no other way."

In Stavridis' office in central Athens, not far from the parliament, a pair of American businessmen discuss in hushed tones their negotiating position. A ticker tape flickers above the head of the receptionist, detailing the latest hot offers: Afandou, Corfu lands, the disused Athens airport.

"We have been acting so stupidly for years, making rules against our own interest," Stavridis added. "Being state-owned and well run is a contradiction in terms."

For those who do take the plunge, there are still myriad hurdles to overcome, despite the efforts of Stavridis' team. Land registry is patchy at best, while investors must also promise to commit their own equity, but many foreign banks are wary of lending to Greek projects. Greece would appear to be only acting now because the Troika has forced its hand.

Back in Afandou, Vassilis Anastasiou, the manager of the golf course for the past 30 years, looks out every day on concrete proof of the "stupidity" of previous government programmes.

A grand breeze-block clubhouse looms over the course; completed in 1973 and, strangled by bureaucracy, empty ever since.

"At least under the military junta it only took three years to build that site," said Anastasiou. "Governments since would have taken 50 years to do the same."

His club has around 100 members, paying €400 a year and with 60 of them playing regularly. But he is adamant that the land must be privatised - even if it means increasing the fees.

"Anyone who argues against it is either an idiot, or a state employee who doesn't think about economic reality and just likes to lounge on the beach," he said. "We have our heads in the noose."

- Daily Telegraph UK

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