Thursday, April 4, 2013

Greece Sells Properties Including London Consul’s Townhouse

Greece sold four properties outside the country, including the U.K. consul’s residence inLondon, as the government raises money to pay its debts, reports Bloomberg.
The townhouse in London’s Holland Park neighborhood was sold for 23.3 million pounds ($35.2 million), the Hellenic Republic Asset Development Fund said in an e-mailed statement late yesterday. A property in Nicosia, Cyprus, fetched 8.3 million euros and real estate in Brussels and Belgrade was sold for a combined 5.3 million euros.
The liquidation of state assets is a great thing. Unfortunately, Greece is not doing it to shrink the state.
Greece has pledged to generate 11.1 billion euros from asset deals by 2016. Finance Minister Yannis Stournaras said in January that property transactions rather than budget cuts should be used to improve Greece’s balance sheet. Real estate makes up about 75 percent of the state’s assets.
This is another sense in which Ludwig von Mises' idea of the "exhaustion of the reserve fund" comes to mind.
What are they going to do when the assets are all exhausted, yet they continue spending?

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