Italy's Prodi:Had No Accord With Spanish PM On Telecom Italia

MILAN -(Dow Jones)- Italy's Prime Minister Romano Prodi said Tuesday there had been no accord with his Spanish counterpart Jose Luis Rodriguez Zapatero for Spain's Telefonica to take a stake in Italy's Telecom Italia.

Prodi reiterated Tuesday that his government didn't interfere in Pirelli's recent sale of a controlling stake in Telecom Italia to Telefonica and a group of Italian investors.

The Prodi government's role in Pirelli's Telecom Italia sale has come under intense scrutiny in recent weeks, after talks between Pirelli and U.S. telecoms giant AT&T collapsed last month due to what Pirelli said was "regulatory uncertainty" and government interference.

"I wish that people would finally start to distinguish propaganda from facts," Prodi said at a conference. "Talk of us being 'closed' (to foreign control) is outrageous."

Italy "is very open" to foreign investment, he said, pointing out that Telefonica is a foreign company.

Prodi's meeting with Spanish Prime Minister Zapatero at Ibiza Feb. 20 has provoked speculation about what the two politicians discussed, since shortly thereafter Italy's Enel made a bid to control Endesa and Telefonica was name as the preferred suitor for Telecom over AT&T.

By Luca Di Leo and Jennifer Clark, Dow Jones Newswires; djitaly@dowjones.com.

(END) Dow Jones Newswires"

Posted to the site on 8th May 2007