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Greece: Bill to Protect Companies of National Strategic Importance

(Feb. 2, 2008) In January 2008, following in the footsteps of other European Union Member States, such as France, Germany, Italy, and the Netherlands, Greece adopted legislation designed primarily to strengthen strategic companies of national importance. The new law requires private investors, either individuals or corporations, who intend to acquire more than a 20 percent share of corporations (sociétés anonymes) deemed to be of "national strategic significance" to obtain prior authorization from an inter-ministerial privatization committee. Companies that that own or exploit nationwide infrastructure networks in which the Greek government is a shareholder, are considered to be strategic companies.

The authorization for a proposed acquisition in such a company is granted upon verifying that private investors meet certain criteria, including transparency in their dealings; experience in the field; solvency; and clear specification of their investment strategies and goals, the structure of their share capital, and especially their shareholders outside the European Union.

The Law also requires companies of strategic significance, prior to entering into mergers, takeovers, or other deals that may endanger the continuation of services in fields of national importance, to obtain the approval of the Minister of Finance to ensure the protection of domestic interests. The Minister has to issue a decision within 30 days upon a company's request for authorization.

Widespread allegations cited in news reports indicate that the Greek government adopted this protectionist measure to shield the Hellenic Telecommunications Organization (OTE) from a hostile takeover by a Greek private entity, the Marfin Investment Group. The European Commission, the chief European Union enforcer of antitrust rules, and the European Court of Justice have viewed such protectionist measures unfavorably as infringing upon EU competition rules. (Amendment to the Law on Establishing a National Cohesion Fund and Other Provisions, visited Jan. 11, 2007).