Thursday, February 23, 2012

Another Wildly Optimistic Assumption In Greece

Joe Weisenthal

In a note on the latest Greek deal, Morgan Stanley's Paolo Batori, CFA, Daniele Antonucci, and Robert Tancsa report on another wildly optimistic aspect of the Greek deal: The assumed receipts from privatization programs.

Privatization receipts are a crucial input for the Greek debt sustainability model. Greece has a substantial portfolio of assets. The latest published Troika analysis estimates further proceeds from privatizations of up to €45bn over time (although the new bailout program might well stretch them over a longer time period or, most likely, reduce the overall amount). Bond market participants seem somewhat skeptical at this stage, given limited granularity on the details.
 

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