By Alex Spillius and agencies 7:26PM BST 11 Jun 2013
The government of Greece said it will shut down the national broadcaster until further notice from Wednesday morning as part of its plan to cut costs.
Employees of the Greece state broadcaster ERT listen to the government announcing ERT's closure last night. Photo: SIMELA PANTZARTZI/EPA
A government spokesman said screens would go black and 2,500 employees would be suspended until the company re-opens “as soon as possible”.
The shock move seemed intended to rouse the Hellenic Broadcasting Corporation (ERT) from what the centre-Right coalition regards as its complacent attitude to demands to provide savings in line with Greece’s commitment to its EU-IMF creditors.
"ERT is a case of an exceptional lack of transparency and incredible extravagance. This ends now," said Simos Kedikoglou, a government spokesman.
He did not say how many employees would be rehired if and when ERT’s channels start transmission again. Unions representing ERT staff members at three terrestrial TV stations, one satellite channel and its radio network said they would keep the stations on the air, without specifying how.
ERT is funded by a direct payment by of 4.3 euros added monthly to electricity bills.
In April the Greek parliament passed a bill which would see 15,000 state employees lose their jobs by the end of next year. It was a high profile part of a range of options to reduce expenditure and ensure bailout funds which the country needs to survive are delivered.
Those reform efforts were hit yesterday by the collapse of a major privatisation sale, when the Russian gas giant Gazprom pulled out of the bidding process for Greece's gas distributor DEPA.
The European Commission said that the failure of the process was a concern.
The setback could cause a shortfall of at least 700 million euros, with Greece needing to raise 2.6 billion this year under the terms of the two record fiscal bailouts.
It came as a mission from the so-called troika of creditors - the EU, IMF and the European Central Bank - began a scheduled audit of Greek reforms and fiscal performance that will determine the payment of the next instalment of rescue funding under bailout agreements.
The spokesman for EU Economic Affairs Commissioner Olli Rehn said that the failure of the sale would "clearly be discussed" during the audit.
A Greek government source earlier said it was "practically impossible" to find a buyer for DEPA this year.
Greek media had earlier raised the prospect of additional budget cuts this year to make up the expected shortfall from the sale failure.
Gazprom said it was worried by mounting unpaid bills owed to DEPA by independent electricity producers and industry.
"We did not receive adequate guarantees that DEPA's financial situation will not deteriorate until the deal is concluded," said Gazprom spokesman Sergei Kupriyanov.
"The takeover procedure could last another year after the end of the tender," he added. "The company is already burdened with unpaid customer bills."
But there are also strong signs that the European Union had reservations about the sale as Gazprom is a key gas supplier to Greece.