PM defends OTE deal

PASOK calls for parliamentary committee to investigate stake sale

Prime Minister Costas Karamanlis defended the government's privatization policy in Parliament yesterday, saying the recent sale of an OTE telecom stake will serve the interests of the state, ahead of an expected vote on the deal.

The conservative government agreed on Wednesday to sell part of its 28 percent holding in OTE to Deutsche Telekom and share the management with the German company.

Opposition parties and union groups have criticized the deal, accusing the government of failing to provide proper disclosure on all relevant transactions.

Karamanlis said the state's interests in the key domain of telecommunications have been protected in a sale which will help OTE, one of Greece's largest companies, become more competitive in the future.

«In all issues of national security, national defence and public order, the Greek state will have the last word. It will have strong veto rights in the organization's basic decisions,» argued Karamanlis.

Under the deal, the Greek government and Deutsche Telekom will each control 25 percent of OTE while the German operator can also raise its holding in the future.

Each party will control five seats on OTE's 10-seat board while Deutsche Telekom will appoint the CEO, though the Greek state will have the right to veto up to two candidates.

Government officials say that until the end of 2011, Deutsche Telekom will not be able to fire employees or sell shares without government approval.

PASOK leader George Papandreou said his party will request a parliamentary committee be set up to decide whether the government has committed a breach of faith.

«The Germans are becoming players, while we become a subsidiary,» said Papandreou.

In a debate marked by a higher than usual number of personal attacks, Coalition of the Radical Left (SYRIZA) MP Alekos Alavanos suggested the conservatives place a German minister in their cabinet since local managers are deemed not good enough to do the job at hand.

The OTE sale will come into effect after it is approved by Parliament, where the governing conservatives have a slim one-seat majority in the 300-member house.

Private and public sector unions, representing more than 2.5 million workers, have said they will press ahead with more strikes against the conservative's privatization plans after having launched the latest wave of protest action on Wednesday.