Greece agrees to privatize 14 of its airports

Deal first of many that will allow economic bailouts

ATHENS, Greece — Greece has agreed to sell to a German company the rights to operate 14 regional airports. The deal is the first in a wave of privatizations the government had until recently opposed but needs to make to qualify for bailout loans.

The decision, which was published in the government gazette overnight Monday to Tuesday, would hand over the airports, including several on popular tourist island destinations, to Fraport AG, which runs Frankfurt Airport, among others across the world.

The concession, worth $1.37 billion, is the first privatization decision taken by the government of Prime Minister Alexis Tsipras, who was elected in January on promises to repeal the conditions of Greece’s previous two bailouts.

The government had initially vowed to cancel the country’s privatization program, but Tsipras has been forced to renege on his pre-election promises in order to win a deal on a third international bailout for Greece, worth 86 billion euros. Without the rescue loans, the country would default on its debts and risk being forced out of Europe’s joint currency.

Citing the rescue loan agreement, Fitch international agency late Tuesday raised Greece’s credit rating by one notch, from CC to CCC — but still near the bottom of the rating scale and deep in junk bond territory.

Fitch said the bailout agreement has reduced the risk of Greece defaulting to its private sector creditors.

But the agency warned that the risks to the bailout’s success remain high.

“It will take some time for trust to be restored between Greece and its creditors, which increases the risk of delayed (bailout) program reviews,” it said. “Meanwhile, the political situation in Greece remains unpredictable.”

The bailout deal is getting its final approvals in parliaments in several European states. Lawmakers in Spain and Estonia approved it Tuesday, while those of Germany and the Netherlands are expected to do so Wednesday.

Separately, the government slightly relaxed its restrictions on banking transactions, allowing small amounts to be sent abroad for the first time in about two months.

The finance ministry’s amendments, also published in the government gazette, include allowing Greeks to send up to $555 abroad per person per month, and allowing up to 8,000 euros per quarter to be sent to students studying abroad to cover accommodation costs.

Greeks can now also open new bank accounts that will have no withdrawal rights, in order to repay loans, social security contributions or tax debts.

The government restricted banking transactions in late June to prevent a bank run after Tsipras announced a referendum on creditors’ terms for a new bailout.

The government’s Uturn on pre-election promises to secure its new bailout has sparked a rebellion within Tsipras’ governing left-wing Syriza party, increasing the possibility of early elections being called as early as next month.

The prime minister is widely expected to call a confidence vote in his government this week, after dozens of Syriza lawmakers voted against him during the ratification of the new bailout deal in Parliament last Friday.

Tsipras was meeting with members of his financial team Tuesday, but the government has said any announcements on political developments will be made after Thursday, when Greece must repay a debt for which it needs new loans.