ECONOMY

In Brief

Gov’t claims VAT rise a measure of last resort Economy Minister Giorgos Alogoskoufis yesterday denied claims of a «secret» agreement with the European Commission for an increase in value-added tax rates, but said this would remain a weapon of last resort if all other measures for reducing the fiscal deficit failed. The European Commission is likely to press for a rise in VAT rates if the government’s efforts to bring the deficit down to the budgeted 1.7 percent of GDP next year, from about 2.5 percent this year, looks unattainable. The hike is projected at 2 percent, which would render additional revenue of 2.4 billion euros. ATHEX says seven banks interested in first ETF Seven banking groups have expressed interest in setting up the first exchange-traded fund (ETF) on the FTSE/ASE 20 blue chip index, the Athens bourse operator Hellenic Exchanges said yesterday. ETFs are index-based mutual funds that trade on exchanges like stocks. They have become popular in recent years partly due to their low costs to investors. The exchange will pick one issuer on November 1. The interested groups are National Bank’s Diethniki, Alpha Bank’s fund management arm, BNP Paribas Asset Management, EFG Eurobank fund management, JPMorgan Securities, Marfin Fund Management and Societe Generale-Lyxor, the bourse said. (Reuters) Romania investment bill Romania has drafted legislation setting criteria for granting state aid and defining types of eligible business in a bid to boost job creation, Finance Minister Varujan Vosganian said yesterday. «We estimate that it can finance investment of over 2 billion euros (in 2008), with 15 to 20 percent coming from the state,» he told a news conference. Vosganian said one of the main criteria to qualify for state aid is the investor’s job creation plan. He said investment of over 1 million euros can be eligible for aid provided that it creates jobs for a minimum 200 workers over a five-year period. Companies could get as much as 250 to 2,000 euros in state aid per each newly created job, depending on the development level of the region they invest in. (Reuters) Tofas Turkey’s Tofas will finance a new 370-million-euro light commercial vehicle project using a 10-year loan with a two-year grace period, CEO Ali Pandir said yesterday. Tofas, a joint venture of Turkish conglomerate Koc Holding and Fiat, said earlier it had agreed to produce 120,000 vehicles a year in new project with an investment of 370 million euros. CFO Nezih Olcay also said the project would add 1.1 billion euros per year to revenues from 2010. (Reuters) Albanian Internet Slovenia’s national telecom operator Telekom Slovenia said yesterday it had bought 75 percent of a leading Albanian Internet provider, AOL SP, for 4 million euros. «This is a very interesting market for us with a huge potential,» Telekom’s CEO Bojan Dremelj told a news conference. (Reuters)