Developments in banking industrial relations

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Greece's upcoming integration in EU Economic and Monetary Union has made timely the question of a radical reorganisation of the banking sector. All sides recognise the need for such reorganisation, but disagree on the direction, type and content of the necessary reforms. This issue has been highlighted in May-June 1998 by the controversy surrounding the sell-off of Ionian Bank.

With EU Economic and Monetary Union (EMU) in prospect, the Greek Government has undertaken a series of initiatives in the banking sector, to which many trade unionists have expressed serious objections. In particular, the union side states that developments in today's markets demand a qualitative improvement in banking labour relations, rather than flexibility of forms of work in the banks.

Today, the process of reorganisation of Greek banking is just beginning and changes already made in the sector affect only 20% of the banking market.

Privatisations and mergers 1990-7

The 1990s began with the creation of several small private banks - Eurobank,Xios Bank, Egnatia Bank, Interbank and Aspis Bank- and then continued with a series of sell-offs, which were, however, limited in number. The Bank of Piraeus was sold to a financial concern, and the Bank of Athens to a Korea n group. Eurobank bought Interbank and the Crédit Lyonnais network of branches in Greece. Midland Bank bought Barclays' marine branch, and the Bank of Nova Scotia bought Barclays' two branches in the Greek provinces.

There were only two mergers, of the smallInvestment Bank withCommercial Bank, and of Housing Bank with Mortgage Bank.

The only foreign banks that opened new branches in Greece were theBank of Cyprus and the Dutch ING group.

Outlook

For the immediate future, the Government has announced the privatisation of the state-owned Ionian Bank (in May 1998 - GR9805170F), Bank of Crete and Bank of Central Greece, as well as the merger of Housing Bank with theNational Bank of Greece. In the private sector, there have been unofficial reports of an impending resale of the Bank of Athens and the Crédit Lyonnais network, and there is still doubt as to whetherNatwest and Barclays will continue to operate in Greece. If they ultimately occur, these changes will foster the development of private banks. Nevertheless, the Greek banking system will continue to be fragmented into many small banks.

For the moment, there have been no moves to sell or merge big private or state banks. Likewise, foreign banks have not shown any interest in making purchases or institutional investments, with the exception ofCitibank and ABN-AMRO, which are interested in expanding their activities in Greece.

Developments in the credit system will basically hinge on the fate of Ionian and Commercial Banks and Ergobank.

The union side has formed the opinion that the restructuring taking place is aimed at creating two powerful Greek banking groups (National Bank and Credit Bank), which will be in a position to impose an "oligopolistic" regime of their own, leading to conditions of unfair competition unfavourable to all small banks, both private and state-owned.

One consequence of such a change in the banking sector would be that the two big banks would determine developments in the banking market, in the operational sphere as well as on labour questions. Trade unionists critical of the attempted changes believe that this prospect will fail to bring about an improvement in the credit system, and that developments in the labour relations field will be adverse, putting thousands of jobs at risk in the immediate future.

These critics conclude that the credit system does require radical reorganisation in view of EMU, but that it should take another direction, which will provide for the operation of many state-owned and private groups of banks, Greek and foreign, capable of responding to current market needs in an environment of healthy competition.

Changes in labour relations

The aim of the banks' administrations is to reduce operating costs by imposing flexibility in labour relations and cutting back employees' insurance rights. However, the union side has advanced the criticism that the banks need specialised, well-educated, well-trained staff, with a good knowledge of foreign languages. It is claimed that widespread employment of part-time staff, introduction of flexitime, employment of fixed-term contract staff, abolition of staff regulations and pay cuts will lower the quality of labour.

On the contrary, the union side believes that job stability, modernisation of staff regulations and adequate pay in accordance with job evaluation and the contribution of each staff member are conditions for the improvement of labour relations. Therefore, for the unions, labour relations can be modernised and upgraded only by creating a greater number of banking groups, instead of only two which will dominate the marketplace.

Commentary

Employees' trade unions in the banking sector are getting ready to deal with a series of changes regarding labour relations, the insurance issue, job security and the rights of all banking staff, and the development of the credit system for the benefit of Greek economy and society.

Many trade unionists believe that these problems can be dealt with only in the framework of the Greek Federation of Bank Employee Unions (OTOE), rather than by each individual bank workers' union, and that employees must remain united and rally together, regardless of whether they work in the private or the public sector. (Petros Patsakos, chair of Citibank Employees Union, member of the OTOE general council responsible for the secretariat of multinational banks)