ECONOMY

Banks, unions at odds over funds’ financing

Prospects for an all-encompassing solution to the troubled finances of banks’ pension funds appeared dim yesterday after a meeting between the Hellenic Banks’ Association (HBA) and OTOE, the federation of bank employees’ unions, ended with the two sides having fundamental differences over how to finance the funds. Indicative of the differences between the two sides was the fact that both bankers and employees, at some point, threatened to quit the talks. HBA President Yiannis Costopoulos, chairman and CEO of Alpha Bank, said that serious differences persist on fundamental issues and implied that the prospect of an agreement had faded. The HBA representatives, apart from Costopoulos, were National Bank and Piraeus Bank chiefs Takis Arapoglou and Michalis Sallas. OTOE representatives told reporters that they were surprised by the bankers’ hostility to their views. They added that the HBA team did not present any integrated plan but demanded that OTOE, as a prerequisite to any further discussion, accept part of a proposal floated two weeks ago by Sallas – which would form a transitional auxiliary pension fund to cover all employees hired before January 1, 2002, or some other date to be agreed upon in the future. OTOE objects strongly to the transitional nature of the fund and the demand that it be a public entity instead of a private fund, because, in the first case, any changes in the nature of the fund could be unilaterally decided by the government whereas any changes to a private fund would need the consensus of all parties involved in its financing. In a statement released after the meeting, OTOE criticized the bankers for their failure to produce a blueprint for any overall solution and asked the government and bankers to decide what part of the burden of financing they will each undertake. The union also called its members to join the rally organized by the General Confederation of Greek Labor (GSEE) in central Athens today, after OTOE’s two-hour stoppage which starts at 1.15 p.m. The government’s decision to oblige listed companies to adopt International Accounting Standards (IAS) from January 1, means that banks must find a solution in a hurry, as, under IAS, provisions for pensions and severance payments must be included in their financial statements and be deducted from equity capital. If an agreement with OTOE proves impossible, then each bank will have to provide its own solution to the problem. Despite its tough negotiating stance, OTOE does not want a piecemeal solution that would undermine its own clout. The banks most heavily affected by this issue are Alpha Bank and Emporiki. The government has let it be known that it would be prepared to come to the latter’s rescue, as it indirectly controls it.