Pensions dialogue off until after elections

THE dialogue between the government and unions on state pensions has been postponed until after the elections because of tensions during the pre-election period, the finance minister said yesterday.

The start of the dialogue was scheduled for yesterday, with the government presenting unions with a study done by an actuarial firm on the state pension system.

Finance Minister Charilaos Stavrakis said the time between now and the May 22 poll would be used to draw up more realistic and conservative scenarios regarding the pensions system.

“The government has judged that it is not the right time to have a serious and productive dialogue on such a serious structural problem, amid the unavoidable tensions of the election race,” Stavrakis said. “We have spoken with all the unions who agree with the position that kicking-off a dialogue now would not be the best thing.”

He added that the climate was not conducive for a mature dialogue. The time could be used to process additional, more conservative scenarios regarding the pensions system.

For instance, Stavrakis said, in the study’s long-term forecasts the economy’s growth rate is set at 3.0 per cent and the government has asked for an even more conservative estimate with a 2.5 per cent rate.

The 2.5 per cent growth rate is higher than the rate in 2011 but is “more realistic than the 3.0 per cent scenario,” the minister said.

“The study will be handed over to the social partners soon and we pledge that the dialogue will start immediately after the elections,” Stavrakis said.

He said it was everyone’s duty – government and opposition – to do everything possible to improve public finances and resolve the structural problems of the economy.

He said the government is committed to solving the chronic structural problems in cooperation with political parties and the opposition.

“I am optimistic that the very serious problem of pensions will be resolved with the help of all parties and the understanding of social partners (unions),” Stavrakis said.

Cyprus has been warned repeatedly of the need to cut the state payroll and resolve the unsustainable state pensions system but so far no substantial actions have been taken apart from eliminating some 1,000 positions in the state sector.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.