ECONOMY

Gov’t close to OTE-DT deal; unions protest

The government said yesterday it was close to clinching a deal with Deutsche Telekom to sell part of its holding in state-run OTE telcom, but OTE’s labor union said it will keep trying to block the move. Greece has long sought a strategic investor for OTE to help it modernize operations, fend off growing competition and help expand into the Balkans but its reluctance to cede management control had kept suitors away. «Our aim was and remains the development of strategic cooperation with a European telecoms company. Now, we are close to a deal with a strategic partner on OTE, with Deutsche Telekom,» said Finance Minister Giorgos Alogoskoufis at a news conference at the ministry. Deutsche Telekom last month agreed to buy 20 percent of OTE from buyout firm MIG and entered into talks to buy a further stake from the government, which currently owns about 28 percent. The German group agreed to pay MIG -26 a share, or about -2.5 billion for the stake. The government has said it is willing to sell up to 8 percent of OTE and share management of the company but has not settled on the form it may take. OME-OTE, the telecom group’s largest union, has staged repeated strikes against the deal, saying it is a prelude to further privatization of the former state-run monopoly and will eventually lead to overall control by Deutsche Telekom. «Co-management? That doesn’t make sense,» said OME-OTE president Panayiotis Koutras at a news conference. «Deutsche Telekom is not coming here to observe Greek managers. If they come, it will be to take control.» OTE’s powerful unions have scuttled deals in the past amid concerns that further stake sales will lead to job cuts, a loss of benefits and affect job security, and have escalated their actions to block a deal with the German company. «They don’t talk about job security, but only about positions. In any case, the Germans are not welcome,» Koutras said, standing beside posters depicting a pig dressed in a German World War II army uniform and raising a Deutsche Telecom flag over OTE headquarters. OTE-OME said it will strike on April 7 and meet immediately afterward to decide on whether to continue with rolling 24-hour strikes, while it did not rule out seeking to get the deal reversed in European courts. «All options to stop the deal are open,» said Koutras. «This will not pass.» OTE shares have lost about 26 percent this year, underperforming the Athens index, which is down about 20 percent. The stock trades about 13 times 2008 earnings, at par with European peers, such as Deutsche Telekom, which trades about 14 times prospective earnings, according to Reuters Estimates.