Greece's plan to sell off its restructured flagcarrier Olympic Airways signifies a last-ditch effort to save the airline rather than a shift in the socialist government's piecemeal approach to privatisation, analysts maintain.
"I don't think the government had any other choice but to sell the airline - things at Olympic had come to a head," said Miranda Xafa, economic advisor for conservative, former Prime Minister Constantine Mitsotakis and currently an analyst with Piraeus Bank.
Greece's state-run, debt-laden airline was relaunched with little fanfare on Friday under the new name of Olympic Airlines as a leaner, debt-free, flights-only operator set for privatisation.
"Three (state-led) restructuring programmes have faltered, more than three billion euros have been spent to keep the airline alive," Xafa said.
More than 50 percent of restructured Olympic Airlines, which has overhauled work contracts so operating costs are 45 percent less, is to be sold to private investors, the government said.
The company's predecessor Olympic Airways has piled up losses of more than 500 million euros (600 million dollars).
Greece outright privatised only one major state-run enterprise in recent years - Hellenic Shipyards. The country's biggest loss-making enterprise was sold to German shipyards HDW.
But other analysts suggest the current government's gradual approach to privatisation - floating state-controlled companies on the Athens stock exchange and slowly giving up control by selling off further stakes slice by slice - is a wise strategy.
"It takes a lot of preparation to make a state enterprise fit for privatisation," said Dimitris Maroulis, deputy director of economic analysis at Alpha Bank, Greece's second-largest.
He said it was "much easier" to sell off a small stake of about 10 percent and gradually sell more until control of the company was eventually given up. "47 percent of (electricity utility) Public Power Corporation (PPC) has been already sold. At (telephony operator) OTE it's even 67 percent," Maroulis said, adding the next step would be to give up control.
He said that because of the recent global economic slump, few foreign suitors had the cash to buy outright full control of Greek companies.
"Don't forget that Europe is still in a recessionary situation," he said.
But Xafa said: "Partial flotations are a completely different thing than privatisations. The government seems to be more interested in selling off minority share packages to maximise its revenues rather than give up management to private investors," Xafa countered.
Greece's recently announced it would miss public deficit targets because of the high costs of the Athens 2004 Olympics. A general election is scheduled for spring 2004.
Partial flotations have earned the government 2.7 billion euros in the year to October and it is counting on revenues of another three billion euros in 2004.
The Greek state holds majority stakes in more than 70 firms, 11 of which are among the biggest firm's listed on the Greek stock exchange.
"They behave like private companies... National Bank of Greece (Greece's state-controlled main bank) is nothing like it was in, say 1998," said Maroulis.
But according to Xafa, the government interferes with the internal workings of these companies and externally sometimes distorts their markets.
The government has meddledin the decisions of state-appointed managers of companies such as PPC and OTE while some firms benefit near monopolies, she said.
"The energy market has been liberalised in name only. After three years of nominal liberalisation, not a single private investment has been made," Xafa said.
Since its flotation on the Athens stock exchange, PPC, which enjoys a de facto monopoly, has been reaping fat profits.
Recent news that state-appointed OTE chief executive Lefteris Antonakopoulos, former head of Greece's industrialists' union, planned to cut up to 4,000 jobs to boost his company's slumping profits raised an outcry from Greece's Communications Minister Christos Verelis.
Antonakopoulos quickly clarified he never planned forced layoffs.
"I believe that Greece's governments have not wanted to clash with the public sector's entrenched, party-affiliated guilds," Xafa said.
Greek politicians, even of the conservative opposition, avoid using the word "privatisation". They prefer speaking of "denationalisations" instead.
Despite all the talk of a brand new Olympic Airlines, the airline was struggling to deal with trade union militants from the minute it was airborn.
The company's 580-strong flight attendants' union refused to work in the new company if management insisted cutting their wages by 15 percent. As a result, Olympic Airlines made its first flights with temporary flight attendants.
"I don't think the government had any other choice but to sell the airline - things at Olympic had come to a head," said Miranda Xafa, economic advisor for conservative, former Prime Minister Constantine Mitsotakis and currently an analyst with Piraeus Bank.
Greece's state-run, debt-laden airline was relaunched with little fanfare on Friday under the new name of Olympic Airlines as a leaner, debt-free, flights-only operator set for privatisation.
"Three (state-led) restructuring programmes have faltered, more than three billion euros have been spent to keep the airline alive," Xafa said.
More than 50 percent of restructured Olympic Airlines, which has overhauled work contracts so operating costs are 45 percent less, is to be sold to private investors, the government said.
The company's predecessor Olympic Airways has piled up losses of more than 500 million euros (600 million dollars).
Greece outright privatised only one major state-run enterprise in recent years - Hellenic Shipyards. The country's biggest loss-making enterprise was sold to German shipyards HDW.
But other analysts suggest the current government's gradual approach to privatisation - floating state-controlled companies on the Athens stock exchange and slowly giving up control by selling off further stakes slice by slice - is a wise strategy.
"It takes a lot of preparation to make a state enterprise fit for privatisation," said Dimitris Maroulis, deputy director of economic analysis at Alpha Bank, Greece's second-largest.
He said it was "much easier" to sell off a small stake of about 10 percent and gradually sell more until control of the company was eventually given up. "47 percent of (electricity utility) Public Power Corporation (PPC) has been already sold. At (telephony operator) OTE it's even 67 percent," Maroulis said, adding the next step would be to give up control.
He said that because of the recent global economic slump, few foreign suitors had the cash to buy outright full control of Greek companies.
"Don't forget that Europe is still in a recessionary situation," he said.
But Xafa said: "Partial flotations are a completely different thing than privatisations. The government seems to be more interested in selling off minority share packages to maximise its revenues rather than give up management to private investors," Xafa countered.
Greece's recently announced it would miss public deficit targets because of the high costs of the Athens 2004 Olympics. A general election is scheduled for spring 2004.
Partial flotations have earned the government 2.7 billion euros in the year to October and it is counting on revenues of another three billion euros in 2004.
The Greek state holds majority stakes in more than 70 firms, 11 of which are among the biggest firm's listed on the Greek stock exchange.
"They behave like private companies... National Bank of Greece (Greece's state-controlled main bank) is nothing like it was in, say 1998," said Maroulis.
But according to Xafa, the government interferes with the internal workings of these companies and externally sometimes distorts their markets.
The government has meddledin the decisions of state-appointed managers of companies such as PPC and OTE while some firms benefit near monopolies, she said.
"The energy market has been liberalised in name only. After three years of nominal liberalisation, not a single private investment has been made," Xafa said.
Since its flotation on the Athens stock exchange, PPC, which enjoys a de facto monopoly, has been reaping fat profits.
Recent news that state-appointed OTE chief executive Lefteris Antonakopoulos, former head of Greece's industrialists' union, planned to cut up to 4,000 jobs to boost his company's slumping profits raised an outcry from Greece's Communications Minister Christos Verelis.
Antonakopoulos quickly clarified he never planned forced layoffs.
"I believe that Greece's governments have not wanted to clash with the public sector's entrenched, party-affiliated guilds," Xafa said.
Greek politicians, even of the conservative opposition, avoid using the word "privatisation". They prefer speaking of "denationalisations" instead.
Despite all the talk of a brand new Olympic Airlines, the airline was struggling to deal with trade union militants from the minute it was airborn.
The company's 580-strong flight attendants' union refused to work in the new company if management insisted cutting their wages by 15 percent. As a result, Olympic Airlines made its first flights with temporary flight attendants.
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