The timing for the announcement couldn’t have been any worse. Just as international lenders from the European Union, the European Central Bank and the International Monetary Fund resumed their audit of Greece’s spending cuts, Athens had to report that the planned privatization of gas utility company DEPA had failed, at least for the time being.
Greece was unable to attract any binding bids for the firm, making the country unlikely to meet privatization targets under the current EU/IMF bailout scheme.
The most promising bidder, Russia’s Gazprom, confirmed Monday it would not take part in the privatization of DEPA under current conditions because of a lack of guarantees. Company spokesman Sergey Kupriyanov said in Moscow the risks involved were too high as the financial situation of DEPA could worsen significantly until any final deal was inked.
Berlin is watching
Greece has a binding goal to raise 1.8 billion euros ($2.38 billion) from state asset sales by the end of September. But so far, the country received only about 700 million euros from the sale last month of a 33-percent stake in betting firm OPAP to a Czech-Greek investment fund.
Some analysts said all signs pointed to yet another write-down of Greek debt before long. Private creditors already had to accept a major cut in the value of their bonds last December.
But another haircut is deeply unpopular with voters in Germany who are the biggest contributors to the bailout. Ahead of September’s general election in the country, the government in Berlin looks unlikely to soften its objections to more concessions vis-à-vis Athens.