If things are really stabilizing or set to get better in Greece and the rest of the PIIGS in Europe, then why did a privatization sale end up with no bidders? That is what we would like to find out about in Greece now. The nation was trying to privatize the natural gas company called Depa. Dow Jones reported the failed sale earlier on Monday and this is not a good sign for outside perception that things in Europe are getting much better.

What matters here is that no bidders surfaced for Depa. If Greece cannot privatize certain assets, then there is going to be yet another budget hole that was expected to be filled under the existing bailouts for the nation. The real risk is that Greece has to opt for more austerity measures rather than raising capital, and the ramification of that is that the Greek public does not want to absorb any more sacrifice on top of the cuts it has already seen.

The so-called sister company of Depa is Desfa, the gas-grid operator. It was said to have received only one bid. We were looking for more than 1 billion euros to come from the privatizations based upon past comments that Greece was hoping these assets would generate somewhere in the vicinity of half of the 2.6 billion euros that the nation needs to raise. We were not as optimistic as the half, but getting a billion euro or even close to it would have been a solid start and a show that long-term infrastructure buyers are at least willing to look at Greece again.

We would remind the public that the OPAP state-run gambling entity came down to a single bid and then the entity posted a loss after the deal closed. Infrastructure buyers are likely concerned that they would have to keep providing services in some manner even if the public cannot pay or if the public refuses to pay. Unfortunately, that is a risk when it comes to dealing with the public.

The Athens Stock exchange’s general index was down over 6% at one point, but closed down over 4% on Monday. The National Bank of Greece SA (NYSE: NBG) was down 4.5% at $5.25 in New York ADR trading in mid-afternoon trading, although this could be continued worries over its banking operation in Turkey. In Turkey, both the iShares MSCI Turkey Investable Market Index (NYSE: TUR) and Turkish Investment Fund Inc. (NYSE: TKF) were each down another 1% or so as the prime minister again called for an end to the demonstrations. Back over Greece, the Global X FTSE Greece 20 ETF (NYSE: GREK) ETF was down 3.7% at $17.27 on last look.

We wonder if Fitch would have still issued last month’s credit rating upgrade for Greece if the nation’s privatization efforts were expected to come with no outside interest in buying the assets.

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