Government faces showdown with PPC union

A full-blown row is brewing between the government and the powerful GENOP union that represents Public Power Corporation workers after a public sector inspector delivered a report on Wednesday which claimed that the labor group received illegal funding from the electricity company and that much of the money was spent on expensive trips by its members.

The dispute is set to play against the backdrop of government plans to sell part of its stake in PPC. Prime Minister George Papandreou said last week that the state intends to reduce its holdings in PPC from 51 percent to 34 percent, although it wants to retain the firm?s management. GENOP immediately declared its opposition to the plans, arguing that the further involvement of private investors would lead to customers having bigger electricity bills.

The union on Wednesday linked the government?s privatization plans with the completion of an investigation into GENOP?s funding and activities by public administration inspector Leandros Rakintzis. The union said on its website that it was ?no coincidence? that the report was submitted to Environment Minister Tina Birbili and the Athens first instance prosecutor?s office just 24 hours after the group threatened rolling strikes in reaction to the privatization plans.

GENOP has flexed its muscle in the past by causing power cuts but the possibility of such outages in the weeks to come could seem like a minor embarrassment compared to the sensitive issues raised by Rakintzis?s investigation.

In his report, the inspector states that GENOP received 31.2 million euros from PPC between 1999 and 2000. He deems this funding to have broken a law that forbids the funding of unions by the company that employs its members. To add to the controversy, Rakintzis found that hundreds of thousands of euros were spent on trips abroad, expensive restaurants, hosting visitors, fuel costs and various gifts.

The fallout from this investigation will be particularly painful for the current government because PASOK has traditionally had a close relationship with GENOP and this will only serve to heighten the tension between the union and the government.

GENOP questioned Rakintzis?s suitability to investigate the union, alleging that in his capacity as the president of the Friends of the Alexandria Library association, he had sent several letters to PPC management in 2008 to ask for donations, which he eventually received.