THE FEDERATION of Employers and Industrialists (OEV) has been trying to stimulate a public debate about the recession and what should be done for some time. On Tuesday night, the group held a conference titled ‘The road for exiting the crisis’, where party leaders gave their views about the recession and what should be done.
All made valid points about the government’s inexplicable failure to recognise the onset of the recession and subsequent reluctance to take the necessary drastic measures. They also highlighted the need to cut public expenditure and all agreed that the way out of recession was economic growth, which is easier said than done in current conditions.
While debate is good, it is of little use when it is not followed by action. This has been a recurrent problem since the recession reared its ugly head, with the government producing a lot of words but very little else.
Finance Minister Charilaos Stavrakis did more of the same at the OEV conference, warning that the budget deficit would reach seven per cent this year and 10 per cent by 2013, if corrective measures were not taken. This was inevitable, he explained, as the rate of growth of public spending was seven per cent more than the rate of increase of revenue.
But while Stavrakis identified the problem, he omitted mentioning what the government would do about it, preferring to end his speech with the familiar platitude: “We will do everything we can, on a consensus basis with parties and the social partners to arrive at a socially fair package of measures.” This was indicative of the government’s prevarication. Public finances are in dire straits yet the government is still incapable of forging a plan of action.
Is Stavrakis being serious in wanting to achieve a consensus and what is the likelihood of this happening in the next year? And what does he mean by socially fair package? Is it possible the necessary measures would ever be considered socially fair, by those affected?
A five to 10 per cent cut in public sector wages and pensions would do the trick, but it may take several years to secure the consent of the unions. Yet we simply cannot afford to wait. The measures need to be taken now and the government needs to accept that the health of the economy should take precedence over social fairness in these desperate times.
We have heard enough warnings and platitudes and now we need to see some action. The president’s inclination to do everything at a leisurely pace might work in the Cyprus peace talks but in the case of the economy it is a recipe for disaster. The government would do well to heed the advice of the former finance minister Michalis Sarris who said on Tuesday: “Those countries that, beyond stopping the (economic) free-fall, will succeed in making bold decisions and structural changes are the countries that will quickly exit the crisis.”
