The Vienna Stock Exchange and several Austrian banks have bought a nearly 70 percent stake in the Budapest Stock Exchange. The agreement has been described as a "milestone" deal for the region.

Major Austrian investors now own a majority share in what was the first stock exchange of the former East bloc following the collapse of Communism in 1989.

Under the deal, the Vienna Stock Exchange will own 14 percent of the Budapest Stock Exchange, while HVB Bank Hungary, a unit of Bank Austria, will take 25.2 percent. Three other Austrian banks will own 29.6 percent of the exchange, bringing the total percentage owned by Austrian investors to almost 70 percent.

The top official of the Hungarian bourse, Zsolt Horvath, tells VOA that the Austrian involvement in Hungary's exchange could lead to similar arrangements with other stock markets in Central and Eastern Europe.

"There will be a greater chance in the future to further enhance cooperation in the region," he said. "Basically there are some smaller, similar seize markets like we are. And maybe by this model there is a bigger chance to set up cooperation with say, Slovakia, Prague or other markets."

The takeover is viewed as an important investment for Austrian banks and their subsidiaries. The Hungarian exchange is one of the fastest growing stock markets in the ex-Soviet satellite states.

But the agreement comes amidst fears among some Hungarians that outsiders are being given too much influence over the national economy. The far right Hungarian Justice and Life Party, for example, claims that Hungary is being bought by aggressive foreigners.

Yet the HVB Bank's securities director, Attila Szalay-Berzeviczi, who is also a board member of the Hungarian exchange, believes those fears are unfounded. Mr. Szalay-Berzeviczi says the Austrian investments will make Hungary's stock market stronger -- and create jobs for Hungarians.

"The two most active [Austrian-owned] members of at the Budapest Stock Exchange are Erste Bank Hungary and HVB Bank Hungary," said Attila Szalay-Berzeviczi. "We are banks located in Hungary, Hungarian people are working in these banks and the bank is paying tax to the Hungarian state. So especially within the European Union, this is hard too define what is Austrian and what is Hungarian. [Besides] there is hardly any bank in Hungary where there is no foreign share holder."

The Austrian investments come less than three weeks after Hungary joined the European Union. They are expected to further boost the financial revenues of the Budapest Stock Exchange, which analysts say is the third most heavily capitalized among the eight former communist countries that became EU members on May 1.

The total capitalization of the Budapest Stock Exchange is estimated at around $18 billion, while the regional leader is Poland, with a total market capitalization of under $50 billion. The Czech Republic is in second place with roughly $25 billion.