ECONOMY

In Brief

Moody’s deals second blow to OTE credit rating within days Moody’s investors service yesterday demoted by two grades the long-term senior unsecured debt rating of OTE telecoms, from A2 to Baa1, citing risks linked with the utility’s investments in Southeastern Europe. Moody’s recognized that these investments give OTE a strong foothold in neighboring emerging markets but expose it to «significantly higher country risks.» A few days ago, OTE was also downgraded from A to A- by Standard & Poor’s, which cited stronger competition in domestic fixed-line telephony and risks in its Romanian investment. Commission extends air subsidies, tells Athens to lift chassis duty The European Commission has extended to October 31 the regime of subsidies in the air transport sector granted by nine EU member states in view of difficulties after September 11. The countries benefiting are Denmark, Spain, Finland, France, Ireland, Greece, Netherlands, Sweden and UK. The Commission said that certain categories of subsidies, such as for insurance, «aim to counter losses caused by emergencies» and can be granted in exception of the rules against distortion of competition in air transport. Separately, the Commission has threatened to refer Greece to the European Court if it does not end the duty on imports of used lorry chassis. The Commission argues this amounts to discriminatory treatment as no such duty is imposed on new chassis which also enter the used market with an unfair advantage when they are resold. OTE discount rates OTE Telecom has submitted to the watchdog National Telecommunications and Posts Commission alternative proposals for its two discount rate schemes (household and business users) for international and long-distance domestic calls on Sundays, which an administrative appeals court found in violation of fair competition rules. OTE said the discounts applied in the last two months will stand in customers’ bills and that they will still be able to avail themselves of equal benefits. Finance merger Hellenic Investment Bank (ETE) has completed the merger through absorption of Marfin-Hellenic Securities, on the basis of balance sheets on June 30. The merger will give ETE «that presence in international markets which will allow it to tap its large capital sufficiency and have an energetic and effective presence in the area of investment banking,» said a statement. Marfin-Hellenic is one of the largest and most profitable firms in its field, with a 4-5 percent share in Greek stock market transactions, 12 percent in Athens derivatives market transactions and a leading position in market making, the statement added. The merger is subject to approval by the Bank of Greece. PPC The Public Power Corporation (PPC) plans to set up in the autumn a real estate arm to improve utilization of its property assets, along the lines of OTE Telecom and Hellenic Railways. In a recent survey, PPC found it owns about 56,300 hectares of land around Greece.