ECONOMY

EU warns Greece over takeover law

Greece must change a national law used to block a takeover of domestic telecoms group OTE or face legal action at the European Court, a European Union commissioner said yesterday. The European Commission 10 days ago gave Greece two months to change the controversial law. It stipulates anyone wanting to own more than 20 percent in a strategic company must obtain authorization from the government. Strategically important decisions in such companies need Finance Ministry approval. The recently adopted law was used to stop buyout company Marfin Investment Group from building a controlling stake in OTE. Greece preferred to have a major European telecoms company as a partner for OTE, and a deal was struck earlier this week with Deutsche Telekom. «This in my view contravenes a basic (EU) treaty,» EU Internal Market Commissioner Charlie McCreevy told reporters in Athens. «They (Greece) have two months to reply to the formal notice. «Hopefully in these two months we can find some accommodation and if we are not satisfied we will refer this to the European Court.» Allowing capital to move unrestricted in the 27-nation European Union is one of the core «freedoms» of the European Union founding treaty. McCreevy has won several legal actions as part of his crackdown on «golden shares» and other hurdles to the takeover of some companies. He is also battling Germany to make sufficient changes to a law that shields domestic carmaker Volkswagen from takeovers. (Reuters)