Government remains firm over PZU and Eureko deal

The cabinet decided yesterday that the State Treasury will not sell, as had been agreed earlier, a 21% stake in Poland's largest insurer PZU to the Euro pean consortium Eureko. The State Treasury Minister Wieslaw Kaczmarek, is cu rrently preparing the stake for public offer, of which a part is intended fo r Eureko. However the public offer will not be made until next year. "We are not surprised by this decision, however until we receive an official confirm ation we will not comment on it. If this is true we will probably appeal to the court of arbitration in Stockholm," said spokesperson for Eureko, Lorrie Morgan. "The government wants to have control over how PZU's profits are inv ested and its ownership structure. Poland should be importing capital and no t exporting it," Wieslaw Kaczmarek explained. Eureko has complained to the D utch government, which has put pressure on the European Union to investigate Poland's treatment of foreign investors. Currently the European Commission i s preparing a report on the privatization processes in Poland. The agreement to buy the stake for zl. 2.8 billion, which was signed by the previous gover nment after it lost the September 2001 general election, would have given co ntrol to Eureko over Eastern Europe's largest insurer. (Prawo i Gospodarka, p. 6; Gazeta Wyborcza, p.1; Reuters) A.K.