Parliament clash over pending 750-mln€ share capital increase announced by Public Power Corp.

Heated debate took place in Greece’s parliament on Monday in the wake of last week’s decision by the Public Power Corp. (PPC) to float a 750-million-euros share capital increase and a same-day announcement by the state assets holding company and privatization fund stating that they will not participate.

The twin announcements mean that after a successful share capital increase, the state’s stake of PPC, the dominant electricity utility in the country, will decrease from roughly 51 percent to around 34 percent, a prospect that generated a firestorm of criticism by the political opposition in the country in subsequent days, and especially from the left.

A tabled question by 54 deputies of SYRIRA party, the left-of-center main opposition, referred to a “sell-off” and a “pitiful example of the Greek people being deceived”. The “deception” in this case, according to the leftist party, is the fact that Greek Prime Minister Kyriakos Mitsotakis did not pre-announce a share capital increase by the ATHEX-listed utility during a state-of-the-economy address a week earlier.

The opposition also blamed the center-right government for sharp hikes in the price of wholesale electricity rates, and for a “sell-off” of PPC amid an “energy crisis”, something that threatens to lead to increases, profiteering and “manipulation of prices”.

In a high-pitched reply, Finance Minister Christos Staikouras reminded that under a SYRIZA government (2015-2019) PPC racked up 900 million euros in accumulated losses in 2018 and a shocking 1.6 billion euros in 2019 – the year in which SYRIZA lost a snap general election.

“It was over the past two years that PPC returned to profitability,” Staikouras said.

“What was SYRIZA’s commitment for PPC? On Dec. 20, 2018 the (then) government council for economic policy … where ministers participated, you all (SYRIZA) decided to exploit alternative plans for the 17-percent stake of PPC, which belongs to the Hellenic Republic Asset Development Fund (HRADF). You aimed to sell the 17-percent share in order for proceeds to off-set the debt. And you didn’t change this. In February 2019 the same council maintained the decision to exploit the 17-percent stake,” Staikouras said.

The government side also underlined that the cash received from the share capital increase will be re-invested back into the utility, instead of going to service the country’s debt, as SYRIZA had agreed with institutional creditors in an update of the third bailout memorandum.

The finance minister also deflected criticism that the decrease in the state’s stake will alter the public character of the company. “The state will remain as the primary regulator on strategic issues, investments and decisions; PPC will remain under public control,” he said.

On his part, Energy and Environment Minister Costas Skrekas fired figures and numbers back at the main opposition, saying the SYRIZA government attempted to sell 17 percent of PPC for 100 million euros whereas “for 17 percent we’re asking for 750 million euros, while you had recorded just 100 million euros in the 2018 budget. Tell us exactly what the sell-off is,” he said.