Greece to sell rights to 40 islands in bid to reduce national debt

Melenos, Rhodes It took local owner Michalis Melenos 14 years to realise his dream of creating 'a village within a village' near the ancient acropolis at Lindos. Born and bred in Rhodes, Michalis drafted in an army of local craftsmen to breathe new li

With the economy in tatters, Greece is gearing up to sell the rights to turn some of its uninhabited islands into luxury tourist resorts.

The nation of an estimated 6,000 islands is desperate to raise money to reduce the nation's indebtedness and has flirted with the notion of selling some of them off.

But financial advisers have now agreed that more money could be raised – with a smaller dent to the national pride – by leasing them for development rather than selling to multi-millionaires in search of an island hideaway in the sun.

Some 40 islands have now been identified by Hellenic Republic Asset Development Fund as having the potential for leasing for 30 to 50 years.

Andreas Taprantzis, executive director for real estate at the fund, refused to identify any of the islands but said the smallest was 0.2 square miles in area and the biggest was 1.2 square miles.

"We identified locations that have good terrain, are close to the mainland and have a well-developed infrastructure and pose no threat to national security. Current legislation doesn't allow us to sell them outright and we don't want to," he said according to a report by Bloomberg.

Greece is coming under increasing pressure to raise funds by disposing of some of its assets and the Hellenic Fund has been instructed to identify how the country can use them to make €50bn by 2020. Selling, or leasing, state assets is one of the conditions imposed in return for promises of €240bn in foreign aid.

Selling off state property is a sensitive issue for Greeks and in 2011 George Papandreou, then the premier, said he would create new laws to prohibit it. However, Prime Minister Antonis Samaras has given his backing to the leasing of islands to raise much-needed cash.

Greece has so far raised just €1.8bn from its asset sales programme.