Portuguese privatisation blitz aims to assuage EU fears http://euobserver.com/9/29700

Desperate to avoid becoming the eurozone's next debt crisis after Greece, the Portuguese government has announced a far-reaching programme of privatisation, cutting back public control in 17 different enterprises.Under the gun not just from investors but Brussels and other EU member states as well, finance minister Fernando Teixeira dos Santos presented the plan to his counterparts across the bloc at a meeting in the European capital on Tuesday (16 March).The plan, the Programme for Stability and Growth (PSG), would see the government divest itself of holdings in the airline, banking, energy, insurance, paper, postal services and rail transport sectors.

The centre-left government hopes to raise a total of €6 billion from the fire-sale over the next four years, with €1.2 billion coming in 2010 and €1.8 billion next year, reducing the public debt by an estimated four percent.The document outlining the PSG argues that the privatisation blitz will contribute "to promote greater efficiency and productivity in the sectors concerned, and the essential reduction of public debt." "The entry of private capital in companies where the state is currently the sole shareholder is a key enabler of efficiencies," it adds.

Lisbon is to offload part or all of its holdings in Galp Energias, Energias de Portugal, electricity distributor REN, paper firm Inapa, the Viana do Castelo shipyards, airline TAP Portugal, Portugal Airports, the CTT post service, BPN bank, the insurance division of Caixa Geral de Depositos and the government's activities in the rail freight sector.The mass privatisation scheme comes atop a four-year austerity plan announced last Monday that will slash welfare benefits, freeze public sector wages and limit government hiring.