OTE agreement under fire

A landmark agreement, ending the civil servant status of future OTE Telecom employees while offering current workers juicy incentives for early retirement, came under heavy attack by the main opposition party yesterday, as fears grew that the deal could fall foul of European Union competition rules. PASOK leader George Papandreou said his Socialist party was against the 1.6-billion-euro agreement as «its cost will be borne by low income-earners and pensioners.» Papandreou also accused the ruling conservatives of seeking to boost OTE’s shares in order to push up the Athens Stock Exchange ahead of a new privatization drive. «This will allow them to sell off other companies very soon,» Papandreou said. Wednesday’s agreement between OTE’s management and union, which Prime Minister Costas Karamanlis lauded during an address at the annual general assembly of the Federation of Greek Industries (SEV), will allow the company to hire new employees on open-ended contracts. These workers will cease to enjoy the jobs for life that OTE employees were previously guaranteed due to the company’s former state ownership. But, on the other hand, unions were offered a highly attractive early retirement package for some 5,000 current OTE employees. The government has said this will cost some 1.6 billion euros. Sources told Kathimerini that about 1.2 billion of this sum will be come out of the public coffers, with only 400 million provided by the former state monopoly. This, however, could well provoke a reaction from the European Commission, as several analysts believe the deal could fall foul of EU regulations safeguarding competition from massive state subsidies. Although there have been no formal announcements on that eventuality, it is understood that government officials have already discussed the problem with legal experts, while top OTE officials have already sounded Brussels out on the matter. The Commission has already caused the government huge grief this year by demanding the ruling conservatives scrap their proudest achievement so far – the controversial ban on media barons winning state contracts.