PUBLIC workers’ unions yesterday accepted, under certain conditions, a government proposal to shave €70 million off the state payroll in two installments in 2011 and 2012.
“In essence, the government proposal is accepted with a condition on the second installment,” said SEK boss Nicos Moiseos after a meeting of all unions representing workers in the state and broader state sectors.
Secondary teachers union OELMEK, however, yesterday reiterated its disagreement with the government proposal.
Smaller union DEOK, affiliated with socialists EDEK, also rejected the proposal.
The government has proposed docking a small percentage from civil servants earning over €1,500 a month for 2011 and 2012. The levy is based on a sliding scale with high earners paying more than those below them.
Moiseos said before agreeing to pay the second installment in July next year, unions would take into consideration the progress in tackling tax evasion and tax avoidance, and mismanagement in state and semi-state organisations.
Unions also want the government to tax wealth and push to introduce issuing receipts for all transactions.
“To implement (the government proposal) we need to see progress, an effort to resolve these points, which concern the workers who will be making the contribution out of their pockets,” Moiseos said.
Moiseos said the proposal will be discussed anew by individual unions and a final decision issued at the beginning of next week.
Asked if the unions will refuse to contribute the second installment if the conditions are not met, Moiseos said they will assess the facts at the time and decide accordingly.
He clarified that by taxing wealth unions meant the €1,000 levy the government intends to impose on all profitable companies and immovable property tax.
The government expects the company levy to fetch some €200 million in two years, though the proposal, which was met with some resistance, has not been finalised yet.
Meanwhile, the government yesterday announced a meeting of party leaders on the economy on July 8 during which President Demetris Christofias will present specific proposals to tackle the effects of the crisis and the economy’s structural problems.
Earlier yesterday, opposition DISY chief Nicos Anastasiades stressed the urgency for having such a meeting.
“This conference should take place immediately, before the President’s departure (for Geneva to meet UN Secretary-General Ban Ki Moon on July 7). Even as early as this weekend,” Anastasiades said.
In this way, Cyprus will send international markets and ratings agencies the message that “we realise the urgency of the situation and are determined to proceed”.
Addressing government workers, the DISY chief said no one is suggesting pay cuts or layoffs.
“But there is a pressing need for taking rational and bearable measures to avoid more painful and difficult situations that will arise if we come to a point where others impose the therapy,” Anastasiades said.
DISY considers the government measures insufficient, a view shared by EDEK.
The government measures “cannot, in an event, be an obstacle in the downward course of our country’s creditworthiness,” EDEK spokesman Demetris Papadakis said.
The island has been downgraded by all three credit rating agencies on its banking sector’s exposure to Greece, and delays in tackling structural reforms, namely the ever-increasing state payroll and unsustainable state pensions.
