ECONOMY

Romtelecom deal closed, says Simitis

OTE’s $243 million deal with the Romanian government to take a majority stake in local fixed-line monopoly Romtelecom will be wound up shortly, since all pending issues have been resolved. «From the discussions we have had in days past and today, it follows that two important issues – OTE and Romtelecom and Eurobank and Banc Post – have been resolved,» Prime Minister Costas Simitis told reporters yesterday following talks with Romania’s prime minister, Adrian Nastase, in Athens. Last November, the Romanian government sold its remaining 17 percent stake in commercial bank Banc Post to EFG Eurobank in a $20 million deal that completes the Romanian bank’s privatization. The Romtelecom acquisition has been OTE’s biggest investment abroad, but so far has drawn significant criticism because it has been losing money. Romanian consumers have also not taken kindly to OTE’s raising prices and unions object to planned layoffs. Greece is Romania’s biggest foreign investor: Simitis said Greek businesses have spent about 2 billion dollars in Romania, while Nastase estimated the investment at $2.5 billion. Simitis promised Nastase Greece would work even after its six-month presidency of the European Union, which ends June 30, to help Romania and neighbor Bulgaria join the EU by 2007. «We discussed the prospect of the Greek presidency having an organized discussion parallel with the (formal) accession talks with Romania and Bulgaria to transfer technical know-how from European countries to provide support for the two countries’ accession efforts,» Simitis said. The two countries were considered too unprepared to join the EU by 2004, along with other eight Eastern European countries, and Cyprus and Malta. Romania and Bulgaria are already well advanced in accession negotiations and both hope to join in 2007. EU officials consider Bulgaria by far the most prepared of the two. Simitis added that Greece and Romania agreed to work more closely on curbing illegal immigration, one of Greece’s priorities as EU president, and having Romania implement the Schengen agreement. The agreement, which provides an open-border area without passport controls, embraces all EU states except Britain and Ireland but includes non-EU members Norway and Iceland. EU candidates will be required to prove they meet EU levels in terms of protecting borders with non-EU countries and controls at airports and seaports.