Tags: Ross | Greece | privatize | State

Wilbur Ross: Greece Must Sell State Assets to Raise Cash

Monday, 18 Jun 2012 07:46 AM

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Greece should privatize as many state-owned assets as possible to generate revenue, noted investor Wilbur Ross, chairman and CEO of WL Ross and Co.

Privatization narrows the gap between liabilities and revenue without causing the pain that austerity measures such as layoffs, wage cuts and pension reforms do.

"I think that what this government really needs to do is to start out with the privatization of some of the assets that they’ve been sitting on that never should have been governmentalized in the beginning and show that they will do good faith," Ross tells CNBC.

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Greece's conservative political party New Democracy emerged victorious in Greek elections on Sunday, which drew applause from markets worldwide.

The party edged out the more radical leftwing Syriza, which favored ditching austerity measures tied to bailout money.

Previous Greek administrations agreed to austerity measures such as layoffs and wage cuts in exchange for rescue funding.

Ditching austerity policies would have threatened to halt the flow of bailout payments and could have opened the door to a Greek exit of the currency union.

New Democracy politicians favor sticking with bailout and its terms, though they say the country needs more growth-oriented policies going forward.

Many European policymakers have complained that austerity policies cut into growth rates and exacerbate economic downturns.

Ross says the incoming government needs to focus on drumming up enough revenue as possible.

"The tax avoidance in Greece — including by government officials — is ridiculous. The black economy is a ridiculously high percentage," Ross says.

"Those are the problems they have to deal with and if they can deal with those than more limited austerity is what’s needed."

When asked whether he would participate in any auctions should Greece throw assets like real estate properties or state-owned companies onto the privatization bloc, Ross held back.

"I don’t really want to inflate the price by saying this, that and something else," Ross says.

New Democracy and PASOK, another pro-bailout party, will now patch together a coalition government.

Germany, the source behind much of Greece's rescue funding, hinted that it may give the new Greek government more time to make fiscal adjustments though insists the overall austerity program stays in place.

"We're ready to talk about the timeframe as we can't ignore the lost weeks and we don't want people to suffer because of that," says German Foreign Minister Guido Westerwelle, according to Reuters.

Editor's Note: The Final Turning Predicted for America. See Proof.



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