4 Nov 2011

As the G-Nothing flops, is Greece still in charge of its own sunshine?

As we await the result of a confidence vote from the Greek parliament, and it’s quite some Gordian knot, I raise the question of whether it matters who is actually PM of this nation.

Because when you strip away all the hype, words and communiques from the G20 process, the tangible results are: no money, no plan, no confidence enhancing measures, and in fact no clue. Indeed the only change is the absolutely huge pressure on the governments of Italy and Greece this weekend. It’s seems a kind of fiscal regime change.

If you want to look at a remarkable example of sovereignty transfer in a crisis, then consider the astonishing example of Greece’s Project Helios. Last week, I could not quite believe that at the EU Leaders’ Summit communique there was a specific sentence about this massive solar energy project.

Paragraph 13:  “Greece commits future cash flows from project Helios or other privatisation revenue in excess of those already included in the adjustment programme to further reduce indebtedness of the Hellenic Republic by up to 15 billion euros with the aim of restoring the lending capacity of the EFSF. ”

Solar energy ‘mortgage’

Project Helios is a remarkable solar power project that will cover 200 square kilometres of Greece with solar panels. It will be cost about 3-3.5bn euros probably paid for by German investors. The electricity then looks set to be carted off through a 10bn euros of electricity motorway to Germany, providing somewhere between 3 and 10 gigawatts of green solar energy. It sounds like a win win for everyone. A new industry for Greece, where as one existing solar player, the boss of the private Athens Airport solar park told me: “Greece can be the Saudi of solar”. And for Germany, a diversified supply of energy to wean it away from Russian gas.

But what paragraph 13 seemed to suggest is that many of the 80bn euros of expected revenues will flow directly to Greece’s European bailout creditors. Greece being forced to mortgage its sunshine to pay for the bailout.

And here is the twist. I understand that George Papandreou consented to this at the European Council under pressure from north European countries to come up with some security for the expanded bailout. I believe this came from the Dutch prime minister. I haven’t had time to put this to the Dutch yet. Perhaps it’s uncontroversial. It sounds like a brilliant project. But it is a remarkable development.