ECONOMY

In Brief

OTE unionists oppose personnel reduction plan OME-OTE, the main union of OTE Telecom employees, yesterday said that a plan to cut 6,250 jobs proposed by Chairman and CEO Panayis Vourloumis would weaken the company and make it «easy prey» to private business interests. Vourloumis has written to the union calling for a dialogue on his proposal starting next Tuesday, but he had already made his proposals public, surprising even the government, which still holds just over a third of OTE’s shares. Vourloumis has said the 6,250 employees must all retire next year, and he said this would be feasible by providing incentives to all those employees over the age of 50 or those who have been working at least 27 years at the company. Since OTE employees still enjoy the protections awarded to civil servants, they must be enticed to retire voluntarily and a change in the personnel regulations must be made by law. Vourloumis has put the cost of the voluntary retirement scheme at 1.5 billion euros, or 240,000 euros per employee. He claims that, despite the cost, it is necessary for OTE to rid itself of its older employees and hire 2,000 younger employees with higher qualifications if OTE is to stay competitive. OME-OTE countered that the cost would ruin the company and its pension fund, but added that employees are ready to discuss a wide-ranging reorganization that would also result in less government interference. IAS obligatory at end-2005, Economy Ministry officials say All listed Greek companies must adopt International Accounting Standards (IAS) beginning with next year’s financial results, according to top officials at the Ministry of Economy and Finance. The standards, drafted by the London-based International Accounting Standards Board, oblige listed firms to declare liabilities that until now they could avoid publishing in their financial statements using various stratagems. The European Union reached a compromise last week whereby banks will be allowed to use derivatives to hedge their positions concerning core deposits (savings accounts). On the other hand, items such as liabilities of their pension funds and provisions for future layoffs must appear on the financial statements. This, along with the rule that firms must fair value their assets, but not their liabilities, is expected to weaken the net financial position of many firms. And, since the IAS emphasizes comparability, listed firms will have to keep two lists of 2004 results, one with and one without applying IAS. Greek listed firms have long complained of the cost of applying IAS, claiming that the time provided, since 2001, has not allowed them to upgrade their information systems to make them compatible with IAS requirements. Investment subsidies Development Minister Dimitris Sioufas has signed a decision to provide subsidies equaling 2.5 million euros to investments made in shipbuilding and ship maintenance in the industrial area of Astakos, in western Greece. There are plans to turn Astakos, which is close to the port of Patras and major highways, into a major port that can host ships of any size. The whole project will cost 126.5 million euros, including 73.3 million in state subsidies.