ECONOMY

Stick to the deal, OTOE warns Alpha, National

The Greek Federation of Bank Employee Unions (OTOE) yesterday threatened to withdraw its support for the proposed merger of National Bank of Greece and Alpha Bank in the event that the two banks do not honor the agreement on the organizational scheme unveiled last month. The umbrella body said the crux of the problem lies in the breach of the contract on the division of management responsibilities and has nothing to do with conflicts between the banks’ employees or their trade unions. «Existing agreements can’t be set aside and the discussion start from scratch,» it stressed and urged that the deal on management responsibilities be implemented. The merger of NBG and Alpha Bank, heralded as the biggest in Greek financial history and expected to pave the way for other companies, came up against its first serious problems after Alpha Bank executives insisted on a greater share of the management at the integrated bank, defying the agreed corporate set-up announced last month. OTOE criticized a joint statement issued by the two banks on Tuesday in response to growing speculation on the imminent collapse of the merger, saying that it had worsened the situation instead of helping to resolve the problems. The joint announcement underlined the banks’ determination to work out their differences based on understanding and trust. They also confirmed their intention of creating a strong financial institution with a European structure. «The use of the phrase ‘equal banks’ does not square up to the actual relative size as far as the dimensions of the two banks are involved,» OTOE argued, saying it generates doubts on whether the merger will actually materialize. The umbrella body urged the government to set out an institutional framework protecting employee rights and their social security benefits. It also called on both government and the banks to adopt its proposal for a single social security fund for all banking employees. Concern over the outcome of the merger continued to weigh on both banks yesterday. NBG stocks were down 0.33 percent and Alpha fell 0.11 percent. Merger problems notwithstanding, NBG’s overseas expansion appeared to be proceeding smoothly as it announced the opening of a new branch in the Yugoslav capital on Tuesday. The new outlet will target both Yugoslav and foreign businesses and individuals. The Belgrade branch brings to 17 the countries in which NBG has a presence.