Take the old Hellenikon airport in Athens for example. The airport closed in 2001, leaving 170 acres of coastal land that successive governments have tried to turn into something that could make money. A decade on, plans to raise €7bn by partnering with Qatar to build a financial district along the lines of London’s Canary Wharf remain stuck on the drawing board.

The old airport is a poignant symbol of hope unrealised. An old Boeing 747-200 sits rusting among the weeds, abandoned airport equipment litters the parking lot, and once-busy terminals stand empty only a few hundred meters from the sparkling Aegean Sea, the wind howling through the broken doors and windows.

Local mayor Christos Kortzidis – famous for a 24-day hunger strike in 2007 that forced private clubs to give the public free access to beaches – has vowed to block any construction on the site, and wants a massive public park built there instead. “We will do everything we can to stop government plans,” the mayor told Reuters at his office, a small bust of Lenin on his desk. “We will exhaust every legal means both here and abroad. This project has no future.”

Destined to fail
One year after the European Union and the IMF bailed Athens out to the tune of €110bn, financial markets are asking not if, but when, Greece will go ahead with the default the bailout was supposed to prevent. Its debt is already rated junk by all three major agencies – below that of Turkey and Egypt – with further downgrades in sight. Greece insists a restructuring would be a major mistake. Pivotal to its effort to avert what Brussels officials prefer to call a rescheduling is an ambitious plan to raise €50bn by 2015, the bulk of it from real estate. It wants to sell off or lease everything from the old airport to tourist sites, from government utilities to the decaying remnants of the 2004 Olympic games.

Privatisations alone will not save Greece from bankruptcy: it will need to tighten its budget belt even more than it already has. But without them, Greece can forget about avoiding default. “I think that without this, it will be very difficult to avoid a restructuring,” said Diego Iscaro of IHS Global Insight. “If we want to look at the optimistic scenario, to avoid restructuring this will be a prerequisite, a must.”

Some analysts say €50bn is much too ambitious a target, and would consider even 20 billion good news. Even that would hardly make a dent. Citigroup said in an April report that even the rosiest scenario – under which Greece managed to raise the €5.5-7.5bn it targets for 2012 – would still not fill a €27bn funding gap that Greece will need to fill in bond markets next year. And according to IMF estimates, €50bn of privatisation proceeds by 2015 would only reduce debt to 134 percent of GDP: a level many economists still consider too high.

National car boot sale
Fellow members of the eurozone want Athens to begin the big sell-off as soon as possible and have demanded that the first 15 billion be raised by 2013. Greek think-tanks and other experts estimate Greece is sitting on some €300bn worth of state property – almost as much as the country’s entire debt. “How could Greece ask its partners for cash and not take advantage of its own holdings?” asked one western official, requesting anonymity so he could speak more freely about the matter. “There was a lot of pressure on Athens to deliver a game plan.”

So far, though, enacting that game plan has been slow. Like a home-owner who can’t afford the mortgage, Greece has, extremely reluctantly, agreed to part with some assets. But it’s still struggling to work out what it owns, let alone what exactly it’s going to offer or how it’s going to package it. And now the building’s other tenants – mayor Kortzidis and millions of other Greeks opposed to any sell-off – are rebelling and refusing to leave. Even if Athens could find takers, its plans risk being upset from within.

Don’t expect Europe to cut Athens any more slack. A Greek default would trigger further problems in Ireland, Portugal and even Spain, and hurt at least politically in Berlin, Paris and other capitals. Berlin hopes Greece’s privatisation programme will convince resentful voters in Germany that the Greeks are sharing the costs of the bailout. “When you have so many people talking about the need for Greece to reschedule its debt, and so many people saying that a rescheduling is unnecessary, there’s only one thing you can conclude – that it’s going to happen at some point, it’s just difficult to say when,” said a eurozone source in Brussels, who spoke anonymously because they are not authorised to talk publicly about Greece’s structural programme.

Ancient wrangle
Greece doesn’t have a lot of time. It promised its international lenders in February it would produce a comprehensive list of what it owns by June. Once it determined which state entity owned what property, it said, it would decide how to proceed.

With a month to go, those plans seem absurdly optimistic. “Forget about trying to list everything. There isn’t time,” said one property expert who sits on one of the seven bank-led committees that have answered the government’s call for expressions of interest in identifying “pieces of property that can be easily and quickly exploited.” The committees haven’t yet been assigned their tasks, let alone having any idea how they are supposed to work, he said.

In that, the plans are following a familiar path in Greece. From the building boom that created modern Athens to the tourist developments that have turned sleepy Aegean islands into the country’s biggest money-makers, property development has often been anarchic.

The 1960s saw a barrage of tourists flock to the Greek coastlines, allured there by cheap flights, cheap hotels and cheaper cocktails. This in turn spurred an ugly rash of cheap developments. The absence of any land registry and a widespread and often blatant disregard for building restrictions, have rendered some state-owned properties unsellable.

Add to this an overbearing bureaucracy  as well as rampant corruption – lobbying group Transparency International says Greece’s building permit offices are the country’s most corrupt institutions along with tax authorities – and it’s little wonder that Greece’s property holdings are a mess. That’s long been a problem. When Pericles built the Parthenon in the 5th century BC, he was accused by political enemies of embezzling money from his unwilling allies “to dress up Athens like a whore”.