Ger­man sup­port brings in­vest­ment fund closer

Kathimerini English - - Front Page - BY DIMITRA MANIFAVA

The gov­ern­men­tap­pears to be get­ting very close to the cre­ation of a Hel­lenic in­vest­ment fund, now that that it has se­cured the po­lit­i­cal and eco­nomic sup­port of Ger­many to­ward that end.

The po­lit­i­cal sup­port is ex­pected to be ex­pressed dur­ing Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble’s visit to Athens, which will likely take place in the lat­ter half of July; it is pos­si­ble that of­fi­cial an­nounce­ments will be made then. The eco­nomic sup­port will come via the par­tic­i­pa­tion of Ger­man in­vest­ment bank KfW in the Greek fund’s share cap­i­tal.

It ap­pears that the strong sup­port from Ger­many, com­bined with the fact that the govern­ment has re­cently in­ten­si­fied its ef­forts to show how valu­able the fund will be, will be able to dis­pel the strong reser­va­tions held by the In­ter­na­tional Mone­tary Fund and, to a lesser ex­tent, the Euro­pean Cen­tral Bank.

Among the govern­ment’s arse­nal of ar­gu­ments in fa­vor of the fund’s cre­ation is a fea­si­bil­ity study con­ducted by in­ter­na­tional con­sul­tancy firm Oliver Wy­man and funded by the Onassis Foun­da­tion, which sug­gested that the fi­nanc­ing gap for in­vest­ments in the next five to 10 years will amount to 20 bil­lion eu­ros per an­num.

The same study also clearly de­fines the ex­is­tence of sig­nif­i­cant gaps in the fund­ing of var­i­ous sec­tors of the Greek econ­omy that could at least

is ex­pected to be ex­pressed dur­ing Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble’s visit to Athens, which will likely take place in the lat­ter half of July; it is pos­si­ble that of­fi­cial an­nounce­ments will be made then. par­tially be cov­ered through the in­vest­ment fund, along with the ad­di­tional value that would bring to the coun­try’s econ­omy. An­other con­clu­sion of the Oliver Wy­man study sug­gests that even if Greece were not mired in an eco­nomic cri­sis, it would still have ex­pe­ri­enced a fi­nanc­ing gap for in­vest­ments, but which would be about half as big as the ex­ist­ing one.

Ac­cord­ing to sources, the ini­tial cap­i­tal of the new fund will amount to 500 mil­lion eu­ros, of which 350 mil­lion eu­ros will come from the re­sources of the National Strate­gic Ref­er­ence Frame­work (NSRF), which is funded by the Euro­pean Union, and the bud­get Pub­lic In­vest­ment Pro­gram, while the rest will de­rive from KfW and the Euro­pean In­vest­ment Bank (EIB).

KfW’s par­tic­i­pa­tion is ex­pected to amount to 100 mil­lion eu­ros, as up to that amount there is no re­quire­ment for ap­proval by the Ger­man par­lia­ment. This is an­other rea­son in fa­vor of the es­ti­mate that the foun­da­tion of the Hel­lenic in­vest­ment fund could take place af­ter the Ger­man elec­tions, sched­uled for Septem­ber 22.

The EIB is likely to par­tic­i­pate in the ini­tial cap­i­tal­iza­tion of the in­vest­ment fund, not through new re­sources, but via the trans­fer of loans from the National Fund for En­trepreneur­ship and De­vel­op­ment (ETEAN), which the EIB it­self has is­sued and are seen to have not been used to a sat­is­fac­tory de­gree. This way, two goals will be met at once: The ob­sta­cle of hav­ing to ap­prove new re­sources for Greece – that of­ten leads to delays – will be over­come, and the ex­ist­ing funds will be bet­ter uti­lized.

Ac­cord­ing to the plan that the govern­ment is cur­rently ex­am­in­ing, the pri­vate in­vestors will not be able to par­tic­i­pate in the ini­tial cap­i­tal of the fund but in spe­cial sub-funds to be cre­ated, pri­mar­ily con­cern­ing con­struc­tion, small and medium-sized en­ter­prises and the en­ergy sec­tor.

In the con­text of scan­ning the pri­vate sec­tor for in­ter­est in par­tic­i­pa­tion, the De­vel­op­ment Min­istry has had con­tacts with the Onassis and Niar­chos foun­da­tions as well as the Hel­lenic Fed­er­a­tion of En­ter­prises (SEV) and the Hel­lenic Shipown­ers As­so­ci­a­tion.

The fund will bear the English name In­sti­tu­tion for Growth in Greece (IfG) and will be based in Lux­em­bourg, while also hav­ing an Athens of­fice.

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