IT’S SUMMER and the temperature is rising between trade unions and the government with looming threats of strikes on several fronts.
In the hotel industry, the timing is no coincidence, with unions exercising maximum leverage at the peak of the tourist season in the usual bargaining over renewal of collective agreements. Meanwhile tensions are also rising in the semi-government sector, where employees are adamant they will not accept a wage freeze imposed as part of a government austerity plan, while at Cyprus Airways, industrial meltdown seems almost inevitable as the management prepares radical action to stave off bankruptcy.
At the semi-government organisations, one union leader said there was no way his members would carry the can for the poor state of the economy: “We can’t accept that workers have to pay every time there is a problem with the economy,” he said on Wednesday. Similar sentiments have been expressed at Cyprus Airways, where unions wondered why staff should be made to pay through wage cuts and redundancies for the mismanagement of the past.
It may seem unfair, but then the rules of free market economics are rarely fair. Is it fair that a private businessman should see a fall in his income because the poor state of the economy means his clients can no longer afford his goods? It’s not his fault the economy is doing badly, yet he is paying the consequences. Those are the rules of the game.
If the government goes back on its plan for a civil service wage freeze, where will it find the money to plug the deficit? Through higher income tax, increases in VAT? Is that fair?
Or shall we just pretend there is no deficit, forget about our ambitions to join the euro and just carry on spending until the state goes bankrupt and spirals into economic freefall?
And what exactly is the government supposed to do about Cyprus Airways? Under EU rules it is no longer allowed to pump in subsidies (not that it would have been fair for the taxpayer to pay for the bailout of CY). So should it again pretend there is no problem, carry on forking out massive wages month after month until the airline goes bust and everyone is laid off?
For too long the government sector has blithely existed in a state of economic privilege over the rest of the population, protected from the harsh economic realities of the outside world. For all their denials, the public sector’s ever increasing wages and benefits are part of the problem. Cyprus spends the highest proportion of its budget on the public sector wage bill in the EU. The refusal to accept cutbacks at a time of crisis merely highlights a selfishness and an arrogance that has over the years contributed to the bloated public service the government must now trim back.
