“We are prepared to bleed,” they shouted. “The prospect of going to jail doesn’t frighten us,” came another cry. And so, another chapter in Greek labor relations was written. In the face of stark threats from the GENOP union representing Public Power Corporation (PPC) workers, the government has, over the last few days, backed away from the idea of selling off some of the company’s lignite and hydroelectric power stations to private firms.
It had earlier been rumored that Greece’s European Union and International Monetary Fund (IMF) paymasters had demanded that 40 percent of the electricity plants be privatized as part of wider liberalization plans the foreign technocrats want to push through. The mere inkling that such a plan was being hatched was enough to unleash the full force of one of Greece’s most potent unionist machines.
Over the years, GENOP has built up a mighty influence derived from two main sources. Firstly, there’s the blunt reality that its members have the ability to flick the power grid switch on or off if they want to put the squeeze on politicians. But it also draws power from the close relationship it has developed with PASOK. For many years, its cosy alliance with the Socialists has proved beneficial for both sides – favorable treatment and political support have proved the ying and yang of this local brand of industrial philosophy.
So, like a cantankerous but passionate Greek housewife scorned for a demure but wealthy foreign visitor, GENOP has reacted with remarkable vigor to the idea that a PASOK government would privatize the electricity sector at the behest of the EU-IMF team. For a week, you could not switch on the TV, turn on the radio or open a newspaper without coming across GENOP’s president Nikos Fotopoulos or one of his associates raging against plans to open up an industry in which PPC has a virtual monopoly.
In a calculated move, Fotopoulos sent on August 2 a slew of text messages warning that GENOP would not take any liberalization plans lying down. The principal recipients of the SMS messages were PASOK MPs. “Our struggle is not for us, it is for the consumer, and that is why we will go to extremes. We will bleed,” said Fotopoulos. “This represents the view of all workers, who were until recently your comrades.” GENOP’s accusation that PASOK was selling out such a longstanding and powerful ally made the government think twice about its plans.
Oblivious to the irony, the day after claiming it was fighting for consumers, GENOP suggested PPC should put up its prices to stave off privatization. But the government said it was already considering other alternatives to selling off power plants, hoping this would defuse the situation. Fotopoulos backed off, saying GENOP was not against the involvement of private capital per se but that it wanted firms to create infrastructure and jobs, not just take over the management of power stations that had been built with taxpayers’ money.
Portugal has shown how the involvement of the private sector can be beneficial, by allowing companies to foot a 20-billion-euro bill to help build the infrastructure the country needed to increase the amount of electricity it produces from renewable energy sources from 17 to 45 percent of its total output in just five years. In return, the firms have been guaranteed wholesale electricity purchase rates by the Portuguese government for the next 15 years.
Fotopoulos’s argument, therefore, has a distinct logic but GENOP’s rhetoric and radicalism means few will believe it’s involved in an altruistic struggle but rather a battle of survival to protect the benefits PPC workers have accrued and the influence their union possesses.
It’s a shame because, in between the diatribes and delusion, GENOP has some timely points to make. For instance, it’s right to question one of the government’s alternative ideas, which is to allow private firms to buy electricity from PPC at cost and then resell it to consumers. Fotopoulos has questioned how the Greek economy would benefit if, instead of following the Portuguese example where private capital went into the creation of infrastructure and jobs, a foreign firm enters the Greek market to act as just a middleman. It wouldn’t necessarily hire a lot of local people and could transfer its profits abroad without leaving any lasting legacy in Greece. And, if it can make more profit by selling cheap energy produced from lignite, what incentives would this company have to invest in renewable energy sources?
Fotopoulos, and other union leaders like him, are allowing crucial questions like this to go unanswered because their only reflex is to turn every development into a political battle. This serves nobody, especially at a time when politics is in a sense irrelevant to the challenges facing Greece – the reforms that have to be carried out do not bear the hallmarks of PASOK or New Democracy, they are the blueprint for a new country where the political landscape has yet to be formed. The challenges they pose are about Greece’s society, not its politics. They have to do with things such as: whether we want individually licensed taxi drivers or companies to be able to buy up permits and employ cabbies as they see fit; whether legal firms should be able to adopt a US-style “No win no fee” practice and the aggressive marketing that comes with it or whether supermarkets will be able to have their own in-house pharmacies.
The introduction of all these things will change Greece in small but incremental and noticeable ways and there is no guarantee that all the changes will be for the better. For instance, I like my pharmacist, Mr Vangelis. He’s polite and knowledgeable and I trust him to give me the right products. I don’t like the idea of buying medicines in a supermarket and I’m worried that if the Carrefour, Sklavenitis or Alfa-Vita around the corner is able to sell drugs, Mr Vangelis will soon go out of business. I would not only lose a trusted pharmacist, the neighborhood would be shorn of a professional, independently run business. It would be a blow to our community. I believe, however, there are ways of opening up Mr Vangelis’s profession so that pharmacies are more accessible and the state doesn’t have to guarantee his profit margins without damaging the fabric of our society. Liberalization does not have to be free of values or morals.
But this is a debate we are not having in Greece. Through their bloody-mindedness, the unions are forcing into a corner people who would be willing to discuss these matters and who have genuine objections to total deregulation. It seems clear that the majority will embrace liberalization because they are so fatigued with the current system. In which case, rather than engaging in a glorious, bloody battle to uphold their values, the unions will be their opposition’s secret weapon in a bloodless coup that could damage rather than improve Greece.
This commentary was written by Nick Malkoutzis and was published in Athens Plus on August 13, 2010.