TELECOMMUNICATIONS: GREECE SET TO SCRAP PUBLIC SECTOR JOBS.

Prime Minister Costas Caramanlis hailed the deal, signaling an expected labor shake-up at other public utilities and services. "We cannot say changes are needed and then agree on nothing. Society cannot be held back by minority groups of organized interests," Caramanlis told a meeting of the Federation of Greek Industries. "2005 will be the year of change and reform."

Under the agreement, negotiated for 10 months, future OTE employees will be hired under private-sector contracts and no longer be protected by state-job guarantees. The deal cost an estimated euro1.4 billion. But news of agreement helped push OTE shares up 6.85% on the Athens Stock Market Thursday, to close at euro 14.98.

Greek civil servants cannot be fired without cause, effectively giving many jobs for life - even when public enterprises are privatized, as was the case with OTE. OTE, listed on the Athens and New York stock exchanges, began its privatization drive in the mid-1990s, with the state losing its controlling stake in 2001. Analysts said arrangements similar to OTE's may now be made at state-run power and transport companies.

Caramanlis is keen to stimulate the Greek economy and cut the country's budget deficit to under 3% of gross domestic product as required under EU rules governing the euro. Unions fear greater job cuts with unemployment stuck at around 10%. "This deal must not, under any circumstances, be used as a precedent to be extended to other labor sectors," said Christos Polyzogopoulos, head of the...