Costas Simitis
In an interview with the newspaper Le Monde, Prime Minister Costas Simitis believes that "the exclusion of Turkey would be a political error … since it is a partner of major importance".

Simitis/Prodi
In a press-conference on the priorities of the Hellenic Presidency, at Zappeion Hall by Mr. Simitis and Romano Prodi, the Greek Prime Minister presented in brief five central axes, consisting in the conclusion of Enlargement, the follow-up to the Lisbon Strategy, immigration and co-ordination of pertinent policies, the accomplishment of the task of the Constitutional Convention, as well as defence, foreign policy and EU external relations.

Iraq
During his speech before the European Parliament Prime Minister Costas Simitis requested European countries to take a common stance on Iraq. "We should be able to shed off our old habits whereby different countries hold a different discourse with different objectives".

ANALYSIS-Greek OTE ponders price of next Balkan move
By Galina Sabeva and Maria Petrakis
SOFIA/ATHENS, June 4 (Reuters) - Greek telecoms firm OTE will be front-runner to win Bulgaria's lumbering state phone firm BTC if it decides further expansion into its Balkan backyard is worth the high investment cost linked to a bid.
OTE management has until Monday to decide if it will put in an offer for up to 65 percent in the outdated and over-staffed fixed-line monopolist in one of Europe's poorest countries.
"The bid price is not the issue. How much capital expenditure for infrastructure is the main issue. I don't know if it makes a lot of sense," an OTE company source told Reuters.
Bulgaria is running out of time to sell BTC, which loses its monopoly at the end of this year, and will favour a strategic investor such as OTE to carry out the deep restructuring the state monolith requires.
Sofia expects little hard cash for the firm, whose profit potential is cloudy, and now regrets the previous government's rejection of a $610 million bid by OTE and Dutch KPN in 2000, at the height of the telecoms market boom.
"While BTC could be worth up to a billion euros in the medium term, the cabinet is likely to get an evaluation of 200 to 300 million euros ($180-280 million) for 100 percent," a Sofia-based international investment banker said.
That equates to a bidder paying little more than the $100 million foreseen by the cabinet as a minimum revenue from the sale.
Earning more will be a bonus for the government's Western-educated reformers, for whom the BTC sale is a test of their ambitious sell-off policies.
OTE ABROAD
OTE, still 42 percent state-owned, has been focusing on fast-growing mobile telephony and investing in the Balkans ahead of the loss of its Greek fixed-line monopoly.
But its international forays have, to date, not been overly successful and it will be tough to convince investors that BTC is an option worth pursuing.
If it decides against expanding a regional network that already includes fixed-line investments in Serbia and Romania and mobile interests in Albania, Macedonia, Romania and Bulgaria private equity firms will have a clearer run at BTC.
Several London-based equity houses attracted to central Europe by low telecoms valuations have surveyed BTC but they would drive a hard bargain to ensure they can sell out at a profit some years down the line.
OTE may bid to keep out regional competitors like Deutsche Telecom-controlled MATAV, to whom it lost out in late 2000 in bidding for Maktel, the dominant operator in Macedonia. Matav and Turk Telecom are also considering bids for BTC.
But any buyer would face a hefty spending bill to revamp BTC's creaking analogue phone network.
The rules of the European Union, which Bulgaria wants to join, demand a quadrupling of the digitalisation rate to 80 percent from 17 percent currently, at a likely cost of more than 400 million euros.
While BTC made a net profit of 241 million levs ($115 million) in 2001, a 43 percent increase from 2000, competition will hit from next year with several cable operators, backed with foreign capital, ready to launch phone operations.
In theory profits will be boosted by swingeing staff cuts and the low phone penetration of 35 percent in a country of eight million people offers scope for expansion, especially as some lines are shared between families.
But analysts question what growth can be expected in a country where the average monthly income is $100 and where BTC is technologically deficient in the mobile market.
BTC owns 39 percent in Mobikom, an analogue operator in which Britain's Cable and Wireless holds 49 percent. Whoever buys BTC will have an option to buy a GSM licence but OTE already owns GloBul, Bulgaria's second ranked GSM operator.
FUND INTEREST
It remains unclear how many equity funds are interested in BTC and what partnerships they might strike up. So far only London's Charlemagne Capital, a central Europe fund, has said it may bid with a telecom firm and a financial investor.
Sources say OTE, which is being advised by ABN Amro, may seek a fund partner, but only later in the purchase process. Eastern Europe's development bank, the EBRD, has said it may inject fresh capital into BTC after its sale, reassuring investors.
Equity houses are targeting telecom auctions in eastern and central Europe, hoping to secure cheap telecoms assets that can be restructured and sold for a profit after three to five years.
Several circled Cesky Telecom during the Prague government's recent auction of a majority stake in its dominant operator.
But Sofia, keen for revenue to ease a bulging current account deficit, does not have the same negotiating room as the Czechs, who in the end postponed their sale until conditions in the distressed telecoms markets allowed for better bids.
"They had better hope that OTE or Matav come through, because I think private sector valuations will be very, very low," said a London corporate financier.
To read a factbox detailing Bulgaria's strategy for the privatisation of BTC, Reuters subscribers can click on.

The central bank of Greece has a new chairman, Nikos Garganas, unanimously elected by the bank's General Bank.
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