[Marxism] Greek Union and Premier Brace for a Fight

Louis Proyect 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

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 
company estimates.

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 
the union.

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.

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