EU TO PROBE GREEK TELECOM GROUP'S PUBLICLY-FUNDED EARLY RETIREMENT PLAN.

• Position: European Union, Hellenic Telecommunications Organization S.A - Brief article

The approximately euro 360 million offered by the Greek State to help fund Hellenic Telecommunication Organisation OTE's early retirement plan has raised suspicions from the European Commission, which announced on February 8 that it was to open a formal investigation under EC Treaty rules on anti-competitive state aid.

Following an agreement between OTE and the trade unions on a voluntary early retirement scheme (VRS), Greece endorsed OTE employees rights by law (i.e. immediate pension payments by the public pension fund TAP-OTE) and regulated the obligations of OTE and the Greek State to compensate the fund for the extra costs due to the VRS. Approximately 5,500 employees are affected (about one third of OTEs total workforce) and its costs amount to approximately euro 1 billion. Greece contributes to these costs by transferring 4% of its shares in OTE, worth approximately euro 360 million, to the pension fund.

The Commission has doubts that Greeces financial contribution to the VRS is limited...