Talks over bank pensions

A government initiative is expected during the week for a single solution to the social security problem of bank employees. It remains unknown whether this initiative will be expressed through an invitation for negotiations to the Federation of Bank Employee Unions (OTOE) by the government or by the bankers. Everything points to the government’s undertaking this initiative, although the essential consent by all bank groups may not be secured yet. Tonight’s scheduled debate in Parliament may well prove particularly enlightening after an interpellation tabled by PASOK deputy Christos Protopapas. Answering for the Ministry of Employment and Social Protection will be Deputy Minister Nikos Angelopoulos, an Emporiki Bank trade unionist from the 1980s, who considers it his obligation to contribute toward resolving the bank’s insurance problem; it is no coincidence he enjoys his political opponents’ esteem. The effectiveness of the government will, however, be judged by whether it manages to pull off at least a minimal converge of the conflicting banking interests and the serious objections by EFG Eurobank. This conflict was exacerbated by the transfer of the Alpha Bank insurance and pension fund (TAPILT) to the Social Security Foundation (IKA). Equally unknown is, for the time being, the content of that single solution. Some banking officials who were in cooperation with the government refer to the creation of a single fund, with benefits and a pension age limit, following the pattern of the National Bank’s fund. The need for a government initiative arose from the failure of the initial proposal by Emporiki President Giorgos Provopoulos to his staff and the definitive announcement for the application of the International Accounting Standards (IAS) from the first half of 2005. Further, the alertness that OTOE displayed with its immediate rejection of a targeted solution to the Emporiki problem has generated fears about the political impact a clash with the bank employee union may have. This was reinforced by the high percentage of participation in the Emporiki strike on Friday despite the differing estimates by the management and the union: The management reported that only 35 percent of the staff took part, while the union recorded a 75 percent participation. New Emporiki proposal And what happens with Emporiki? Will adopting a single solution for all banks help shake off its problem in time before its share is devalued? Provopoulos has already started testing the waters for a new, alternative proposal with an equal result to that of his original one to transfer the employee’s auxiliary pension fund (TEAPETE) to IKA. He seems inclined to discuss the maintenance of the fund as an independent legal entity based on an agreement for small changes to reduce spending. In a phone call with OTOE President Dimitris Tsoukalas right after the strike, a meeting was arranged with the participation of the Emporiki union’s head, Giorgos Constantinopoulos. The eagerness to find a solution is clear, as is the union’s fear of Emporiki’s devaluation, since things will all be very different when the market knows that the exact deficit and losses are also recorded in the bank’s accounts after IAS are applied. In this case neither side rules out «the buyout of Emporiki even at a ridiculously low price.» Domestic banking suitors, even those who had in the past denied cooperation with Credit Agricole for the main stake of Emporiki, would be willing to express interest for the purchase of a cheap bank. A chain reaction would be triggered then, leading to developments on the temporarily «frozen» case of the Postal Savings Bank. Similar blueprints, but with different terms, are expected in case the insurance problem of the bank is resolved. Emporiki’s plight highlights the responsibilities of many people who contributed to the situation that Provopoulos must handle. Emporiki was once a private group with a commanding presence (controlling among others the Ionian and Attica banks, the Elefsis Shipyards, the Athens-Piraeus urban railway, and maritime companies), and was slowly but steadily stripped from its assets to the benefit of many who expanded their market share in the banking sector.