The government has granted troubled mining company Larco a lifeline at the expense of Public Power Corporation, ignoring the former’s general problem of sustainability and the consequences not only for PPC but the Greek economy in general.
On Wednesday Energy Minister Giorgos Stathakis told ruling SYRIZA MPs from Fthiotida, Evia, Kastoria and Viotia, as well as Larco union representatives that the government will mediate “in order to overcome the impasse and find common ground with a mutually acceptable solution.”
That solution will have three dimensions. The first requires that procedures advance toward a new supply contract between PPC and Larco. Secondly, Larco must lower its production levels in accordance with the low rate of nickel, transferring additional cash flow to PPC and rationalizing its salary costs. Thirdly, PPC must accept the postponement until January of any measures to change the industry’s supplier.
Stathakis’s statements do not provide any answers to Larco’s general sustainability problems, while PPC will suffer the collateral damage as the mining company’s debts to the power utility have exceeded 300 million euros and are growing by the month as Larco is unable to pay its bills.