PPC union poised for powerful response

One of Greece?s most powerful labor unions, GENOP, which represents Public Power Corporation workers, looks set for a head-on collision with the government as it is expected on Thursday to approve rolling 48-hour strikes that could affect electricity supplies around the country.

GENOP?s executive committee is due to meet on Thursday to rubber-stamp the open-ended action, which will signal a ratcheting up of the tension between the two sides in the wake of an investigation that suggested PPC?s management had been illegally funding the union for years and that much of this money was squandered on perks for its members.

The union, however, is unlikely to limit its fightback just to the imminent strikes. Sources said that its legal advisers are also examining the possibility of suing the government for failing to cover the shortfall in GENOP?s social security funds. They argue that the government is legally bound to plug the gaps in GENOP?s budget because it was part of the deal that saw the union allow its assets to be presented as PPC?s assets, which amount to 12 billion euros.

There was a shortfall of 900 million euros in social security funds last year as a result of a large number of PPC workers taking early retirement. The government only stumped up 600 million euros and GENOP now seems intent on suing for the remaining 300 million.

The tense atmosphere between the government and the union was triggered in part by the completion last week of a report by public administration inspector Leandros Rakintzis which claimed that GENOP received 31.2 million euros from PPC between 1999 and 2010 and that the funding broke the law. Rakintzis also alleged that hundreds of thousands of euros were spent on trips abroad, expensive restaurants, hosting visitors, fuel costs and various gifts.

The government and the union are also at loggerheads because Prime Minister George Papandreou said earlier this month that the state intends to reduce its holdings in PPC from 51 percent to 34 percent. GENOP argues that the further involvement of private investors would lead to bigger electricity bills for customers.

Government sources said that Papandreou has instructed his ministers not to buckle under the pressure from GENOP in the coming days. The premier feels that the union has lost the support of the public and many of its members. Papandreou is also aware that his government has to make it clear to markets and investors that it is willing to push through its privatization plans despite opposition.