[Marxism] Greek Union and Premier Brace for a Fight
lnp3 at panix.com
Tue Jul 19 09:10:14 MDT 2011
NY Times July 18, 2011
Greek Union and Premier Brace for a Fight
By RACHEL DONADIO
ATHENS — Sitting in his office on a recent morning beneath
photographs of Marx, Lenin and Che Guevara, Nikos Fotopoulos, the
leader of Greece’s most powerful labor union, took a freshly
printed flier from a stack. “We are ready for new battles,” it read.
“And we are,” Mr. Fotopoulos said, sipping an energy drink and
then chasing it with an espresso. “We will continue with street
protests because we still have unfinished business with the
government and the troika,” he said, referring to Greece’s three
foreign lenders: the International Monetary Fund, the European
Central Bank and the European Commission.
Last month, amid violent protests, Prime Minister George A.
Papandreou narrowly managed to push a new package of austerity
measures through Parliament, including plans for selling $71
billion in state assets, a step that economists and the troika say
is crucial to overhauling Greece’s bloated public sector.
But whether Mr. Papandreou will be able to carry out the plan will
depend to a large extent on people like Mr. Fotopoulos. His union,
Genop, represents workers at the Public Power Corporation, which
is owned jointly by the government and by private investors.
The union vehemently opposes privatizing public entities and is
known for its aggressive protests, including walkouts at the
Public Power Corporation that have caused rolling power failures,
costing Greece $42 million to $57 million in recent weeks, the
Genop represents a particularly thorny problem for Mr. Papandreou.
It is a creation of the governing Socialist Party, which over the
years helped build up the labor-centric jobs-for-votes system that
the prime minister is now forced to dismantle. To carry out the
reforms, Mr. Papandreou will have to strike at the heart of his
own party — and it remains to be seen whether he has the muscle,
let alone the stomach, to do so.
“That’s a real war, and a very uncertain war,” said Takis Pappas,
a political science professor at the University of Macedonia. “Is
Papandreou’s army strong enough to withstand this storm? Let’s
wait and see.”
The battle with the power company’s workers and their union is
even more personal for Mr. Papandreou. In 2007, Mr. Fotopoulos
endorsed Mr. Papandreou as Socialist Party leader.
Sitting at his desk, Mr. Fotopoulos pointed to photos showing Mr.
Papandreou visiting the power corporation’s office with union
workers. Next to them is a photo of George Papaconstantinou, now
Greece’s energy and environment minister — responsible, among
other things, for selling off more of the government’s stake in
the power company.
Above Mr. Papaconstantinou’s head, someone had written a cartoon
bubble that read, “O.K., Mr. Fotopoulos, if you don’t agree, then
I’d better leave.”
The government owns 51 percent of the power corporation and
controls its board. The state sold the other 49 percent in a
partial privatization in 2000.
Mr. Fotopoulos, 49, a compact, bearded man with an iron handshake,
said the union endorsed Mr. Papandreou as Socialist Party leader
in 2007 because he seemed “more approachable, warmer, closer and
more concerned about our problems.”
“We still respect him as a politician and a person,” he said, “but
we believe these are barbaric policies that go against the
interests of the Greek people.”
To many analysts, the coziness between the Socialist Party and the
union is a sign of the difficulties the government is likely to
encounter in selling off more of the power corporation, as it is
scheduled to do in 2012.
This month, Mr. Papaconstantinou said that rather than selling
more of the Public Power Corporation at the current lower market
rates, the government might explore alternatives, including
selling off some of its hydroelectric or lignite-powered plants
while looking for a strategic investor.
Arthouros Zervos, the power corporation’s chief executive, said in
a telephone interview that there was some wiggle room in the
agreement between Greece and its lenders that was approved by
Parliament. Under the accord, the government has agreed to sell
$71 billion in state assets by 2015.
“I think there is a possibility of a negotiation there,” Mr.
Zervos said. “This commitment is mainly in terms of bringing a
certain amount of money from the privatization to pay down the
debt. So my reading is if you have some alternative ways of
bringing that money, that could be discussed with the troika.”
Unlike other public sector companies in Greece, the power
corporation is profitable, producing a return of $790 million in
2010 from $8.2 billion in sales. But analysts are worried that its
future profit picture is clouded by regulatory uncertainties and,
most crucially, the sway of its unions.
To many people, the issue is not simply about selling a stake in
state-run companies, but about how to transform Greece’s public
sector. “It’s not about making money; it’s about changing a
culture,” said Panagis Vourloumis, who was chief executive of the
Greek telecommunications monopoly OTE under the previous
center-right government and oversaw the sale of a 30 percent stake
in the company to Deutsche Telekom in 2008.
The culture of formerly public companies is proving resistant to
change. “Irrespective of price, it is really about, ‘Do you have
the leverage to run a company that has never been private before?’
” said Jens Bastian, an economist at the Hellenic Foundation for
European and Foreign Policy in Athens.
Analysts say the government has not convinced voters that
privatization is a long-term remedy for the Greek economy. Selling
off public corporations is deeply unpopular among Greeks, who fear
a fire sale of state assets and applaud Genop and other unions for
But in the growing divide in Greece between public-sector and
private-sector workers, an increasing number of Greeks regard the
power company workers in particular as an overpaid, overprotected
caste. According to Mr. Fotopoulos, Genop’s 21,000 members are
paid an average net salary of $1,980 a month and its 35,000
retirees an average net pension of $2,122 a month — much higher
than the Greek average.
“The unions are even worse than the politicians,” said Theodoros
Yiannopoulos, as he sold bread rolls from a street cart in
downtown Athens. “They were going to five-star hotels in Europe
and sending the bill here.”
He was referring to a recent report by Greece’s public
administration inspector, which found that since the 1980s, the
power corporation had paid Genop more than $32 million, largely
for “social tourism,” or vacation subsidies — but also to pay for
protest demonstrations against the company itself, a surreal twist
that captures the complex vested interests that are proving so
hard for Mr. Papandreou to untangle.
Mr. Fotopoulos called the report “a smear campaign” and said the
subsidies were part of the contract negotiated by the company and
Others say the battle is as much political as economic. “The
biggest challenge is for the politicians to believe that there’s
still a future without unions,” said Takis Athanasopoulos, who
clashed bitterly with Genop as chief executive officer of the
Public Power Corporation under the previous government.
The telephone interview was interrupted at one point when his line
went dead — from a power failure caused by a Genop protest.
Niki Kitsantonis contributed reporting from Athens, and Landon
Thomas Jr. from London.
More information about the Marxism