The last-minute withdrawal of Russian investors from the privatization process of Greece’s leading gas supplier could deal a significant blow to the projected privatization revenues of the Greek government for this year and raise questions about managing the resulting shortfall in the next six months.
Russian gas giant Gazprom withdrew on Monday from submitting a bid for the Greek state gas distributor DEPA, citing concerns over the company’s financial sustainability.
Since Gazprom was the only expected bidder, the public tender automatically failed and will have to be reissued.
The Greek government had expected to raise at least 700 million euros from the sale of DEPA, which is approximately a quarter of the money Greece needs to raise through privatization this year according to the targets set under the joint EU and International Monetary Fund (IMF) bailout package.
The news of the Russian withdrawal coincided with the visit of the ‘troika’ delegation of international creditors – the European Union, the IMF, and the European Central Bank (ECB) – who must assess Greece’s progress in implementing austerity measures and structural reforms. The creditors’ assessment will determine the disbursement of a new tranche of loans to Greece amounting to 3.3 billion euros, approved in May.
Greek media reported today that the resulting shortfall in privatization revenues will likely lead to new fiscal measures that the Greek government had hoped to avoid at least until next year.
“The shortfall will be compensated by cuts in spending and new taxes,” writes the Greek left-leaning daily Eleftherotypia.
“There is now a possibility that the Greek government will be asked for new measures, or the realization of other privatization plans scheduled for 2014,” writes the local conservative daily Eleftheros Typos.
