Greek PM promises to keep Olympic Airlines flying
THESSALONIKI, Greece: The Greek prime minister on Saturday vowed to defend troubled Olympic Airlines by cutting staff with a voluntary redundancy program and transfers to other state jobs.
Greece’s national carrier is under increasing financial pressure after a European Union court ruled in February that Greece had failed to recover some €130 million (US$185 million) in illegal subsidies paid to the airline.
“Regarding Olympic, the aim is to (create) a robust and competitive company which will retain its logo and name but will be free of debts and problems with the European Union,” Prime Minister Costas Karamanlis said.
He made the remarks during an annual speech on the state of Greece’s economy.
Karamanlis issued a similar pledge to restructure Greece’s financially troubled National Railway Company, or OSE.
“Among our highest priorities is the (effort) to find a solution for Olympic Airlines and OSE,” which he said together cost taxpayers at least €2.7 million (US$3.8 million) a day.
Olympic employs around 8,500 workers. Repeated efforts to restructure and privatize the company have failed. Local media reports maintain that about half of Olympic’s staff will be axed.
Karamanlis, 51, was re-elected last year. But his conservative government is facing strong opposition from unions which argue that its financial and labor reforms are hurting low-income Greeks.
More 10,000 union-backed protesters rallied Saturday in Thessaloniki, Greece’s second largest city, where Karamanlis gave his speech.
Karamanlis’ problems have been heightened by the conservatives’ slim majority of just two seats in parliament — allowing government dissenters to publicly doubt Karamanlis’ decisions with impunity.
But in Saturday’s speech, Karamanlis staunchly defended his government’s financial performance. He said Greece had largely weather the global financial downturn with a modest drop in economic growth, from a projected 4 percent GDP increase to a 3.5 percent increase on an annual basis in the first six months of the year.
Key for economic stability, he said, were two major pipeline deals signed in the past year: One project that will eventually carry gas from Azerbaijan across Turkey and Greece to Italy, and Greek participation in Russia’s South Stream pipeline project.