By N. Bellos
European institutions have reportedly informed the Greek government that all “open issues” related to the recently achieved conclusion of the first review of the Greek program (third bailout) should be resolved by June 2, when an European Central Bank (ECB) board of directors meeting is scheduled.
Although the leftist Greek government was finally granted the first review at last week’s Eurogroup meeting, lenders nevertheless cited three to four issues that must be resolved before the first tranche (7.5 billion euros) of a 10.3-billion-euro loan flows into Greek coffers. Creditors want a full liberalization of the more-or-less “closed” framework for managing non-performing loans in the country. They also insisit on faster privatization of a handful of state-run entities, especially in the energy sector, and an immediate answer on when a monthly bonus allocated to low-income social security beneficiaries will be eliminated, among others.
According to one source, one issue that stands out in creditors’ minds is a stalled real estate development project at the expansive Helliniko site, where the old Athens airport operated for decades. Although an international tender was declared and won by a consortium led by Athens-based Lamda Development, nary a shovel has been lifted towards implementing the investment.
Creaking Greek state bureaucracy and charges that the leftist government is lukewarm on implementing the agreement have repeatedly been aired.
The site is located eight kilometers southeast of downtown Athens on roughly 608 hectares, nearly twice the size of New York City’s Central Park. A beachfront of 3.2 kilometers is included. The proposed eight-billion-euro redevelopment plan aims to turn the disused airport and surrounding tracts of land into an international five-star destination and a landmark investment goal for debt-laden Greece.
A resort, a high-rise residential tower, offices, shopping centers, a new marina, an aquarium and a large amusement park are all part of the plan. Speculation is also rife over the possibility of relocating the sole Athens-area casino at the site.
Lamda Development SA heads an international investor group that acquired the site for 915 million euros in 2014 from the then Samaras government.
Potential investors, not to mention the country’s institutional creditors, are keen to see how the current government will proceed with the project, which is a “litmus test” for large-scale and high-end real estate development in Greece.
In terms of the other outstanding issues, which were formally cited in a text after the Eurogroup meeting, are now being discussed at the technocrats’ committee level, with sources in Brussels emphasizing that differences are minimal and that a deadlines will be met.
If the remaining issues are resolved, ECB head Mario Draghi is very likely to propose a restoration of a waiver for Greek bonds, something that will boost liquidity in Greece’s capital controlled banking sector and lower the cost of borrowing.
