The Greek government is considering securitizing future tax and other revenues as a way to raise money to pay for venues and facilities necessary for the Olympics to be held in Athens in 2004, according to finance minister Yannos Papandoniou.

"It's a useful proposition: Olympic bonds. We can turn future money inflows ... into bonds and cash them in in advance," Papandoniou told the Sunday Eleftherotypia newspaper, adding that the bonds could bring in as much as $800 million annually over the next seven to eight years.

The government's plans to pay for the Olympics via proceeds of a lottery were cancelled after opposition parties suggested that the government was "turning the country into a large casino". The opposition New Democracy party also accused the government of making secret deals with the company that would run the lottery.

If it goes ahead the deal would be the country's first public securitization and Europe's first true future tax-backed securitization.

Richard Wilson, regional director for Central Europe, Middle East and Africa at Duff & Phelps, pointed out that securitizations backed by future tax revenues are relatively common in the United States, where they have been issued by municipal and state governments and by institutions such as port authorities. Similar deals have been issued in Argentina, Columbia and elsewhere in Latin America.

Several Italian states have used securitization techniques to package future tax revenues, though those deals have not been sold free of the issuer's credit and are considered as quasi-securitizations, Wilson added.

Other experts added that it is likely to be important for the Greek government to issue a deal free from its credit so that it doesn't increase its borrowing in the run-up to its proposed entry to the European single currency, an event that the Greeks hope will take place well before the Olympics.

"A deal like this would be perfectly possible and would present a perfect solution - paying for the Olympics, but not increasing borrowing," said one.

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