U.S. Markets open in 3 hrs 33 mins

Greece to break up state power company by 2016

A man holds a plastic bag with tomatoes as Greek market vendors hand out free food during a protest in Athens, Wednesday, May 15, 2013, as the union of Greek farmers markets went on strike Wednesday. Protesters set up stands and started distributing vegetables to a fast growing crowd. The market vendors are the latest professional group in Greece to protest a sweeping market liberalization drive demanded by rescue creditors, and timed their protest to coincide with draft legislation due to be voted in parliament to implement the new guidelines. (AP Photo/Thanassis Stavrakis)

ATHENS, Greece (AP) -- Greece's conservative-led government on Wednesday announced plans to break up the state-run Public Power Corporation by 2016, as part of a privatization program demanded by the crisis-hit country's creditors.

Government spokesman Simos Kedikoglou said that about 30 percent of PPC's resources would be spun off to create a rival company, while the company-owned transmission operator, Admie, would also be sold.

The government is planning to sell off a 17 percent stake of PPC after the breakup, leaving it with 34 percent of company and powers to veto decisions, Kedikoglou said. It will also retain a minority stake in the transmission operator.

"Careful consideration will be made for staff. There will be no dismissals," Kedikoglou told state-run NET television, insisting the privatization plan had the full backing of the government's left-wing and center-left coalition partners.

PPC employs about 20,000 people.

There was no immediate reaction from the main left-wing opposition party, Syriza, or the powerful electricity workers' union, Genop-PPC, which in the past has threatened strikes over privatization.

Shares in PPC were up 5.1 percent in Athens on Wednesday, with investors also buoyed by a sovereign rating upgrade by Fitch late on Tuesday. The main Athens index was up 2.4 percent.

Greece's rescue lenders — its euro partners and the International Monetary Fund — have been pushing the government to speed up its privatizations campaign, one of the conditions for the bailout loans it has been receiving since 2010.

They are also demanding faster progress in dismantling market licensing restrictions and are pressing for the mass dismissal of civil servants — triggering a new round of strikes this month.

On Wednesday, high school teachers' union members met to vote on whether to defy an emergency government order that would prevent them from holding rolling strikes from Friday. Teachers risk arrest if they press ahead with the strike, which would severely disrupt annual university entrance exams.

In central Athens, striking farmer's market vendors handed out fruit and vegetables for free to hundreds of consumers. On Thursday, air traffic controllers plan to ground all flights for four hours from midday.