ECONOMY

Gov’t wants to further cut stake in OTE telecom

Greece wants to further reduce its holding in OTE telecom next year, preferably selling to a European operator, after divesting its stake in Emporiki Bank, the country’s finance minister said on Saturday. «The government’s intention is to further divest in OTE should there be interest from a European telecoms group to participate in OTE’s share capital and develop cooperation,» Finance Minister Giorgos Alogoskoufis told the financial daily Imerisia in an interview. «We will explore this in 2007,» he said. Greece, which currently owns 38.6 percent of OTE, is also selling its holding in Emporiki Bank this year, seeking proceeds to pay down public debt, one of the highest in the eurozone as a percent of gross domestic product (GDP). France’s Credit Agricole and Bank of Cyprus (BoC) are so far the two suitors competing to take over Emporiki, Greece’s fourth-largest lender by assets. «We have two good offers which will be evaluated before the deadline expires. If there is a third, equally serious, offer we will look into it as well,» Alogoskoufis said. Greece’s securities watchdog has set a July 25 deadline for any counteroffers. Credit Agricole is offering 23.50 euros in cash, valuing Emporiki at 3.1 billion euros ($3.92 billion). Bank of Cyprus is offering cash and stock, 3.25 of its shares plus 6 euros in cash for every Emporiki share. The minister said the government will compare the two offers after getting a guaranteed price for the stock component of BoC’s offer by Citigroup, its adviser on the privatization. Based on Friday’s closing price, BoC’s combined offer for Emporiki comes to 27.60 euros per share. Alogoskoufis also said Greece will continue its fiscal adjustment in the next two years to shrink its budget deficit. Scrambling to cut the fiscal gap to avoid EU sanctions, the government aims for a 2.6-percent-of-GDP shortfall this year. «The mild fiscal adjustment does not end in 2006. It will continue in 2007 and 2008,» Alogoskoufis said. «Over the last two years we have had a fiscal adjustment of about four percentage points. We will not be going after two percentage points a year but, as are all countries with even small deficits, we are obliged by the Stability Pact to be reducing the deficit by 0.5 percent each year.» (Reuters)