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Macroeconomic and socioeconomic impact of the privatisation programme of the Hellenic Republic
Category: Structural Changes
SubCategory: -
Date: 15/07/2020
The aim of this study is to highlight the macroeconomic and socio-economic impact of the Hellenic Republic's privatisation programme. In particular, the study examines the effects of the overall programme of the Hellenic Republic Asset Development Fund (HRADF) for the period 2011-2019 and quantifies the impact of selected major privatisation projects. The effects are presented in terms of changes in socio-economic indicators such as GDP, net fiscal revenue and employment. The development of the private property of the Hellenic Republic has been a key pillar of the effort to correct the structural problems and macroeconomic imbalances that had led Greece to the deep social and economic crisis of the last decade. The revenues from the concessions of infrastructure and the sale of shares and real estate have created a fiscal space, which should otherwise have been covered by further cuts in public spending or by tax hikes. In addition, the privatisation agreements contain improvements and interventions in the regulatory framework, as well as investment commitments, which have stimulated economic activity and increased the efficiency of the production factors during a particularly difficult period for Greece. Furthermore, the changes in the business model and corporate governance that take place with the entry of strategic investors in the assets' development have a positive effect on productivity. Finally, the progress with the privatisation programme has been seen by the international investor community as evidence of the state’s commitment to the effort to reform the Greek economy. Taking into account the above effects, the privatisation program is shown to have had a strong positive impact on the Greek economy, with clear social benefits during a particularly difficult period for the country. For the overall programme, it is estimated that privatisation boosted the country’s GDP by around EUR 1 bn a year on average over the period 2011-2019. Over the same period, the average impact on employment was close to 20,000 full-time jobs.
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