CRUCIAL talks on the economy broke down yesterday when political party representatives walked out, accusing the government of not only failing to present additional measures to deal with the July 11 blast that took out the main power station but also for axing measures agreed to last week.
Yesterday’s meeting had been arranged last Friday after a three-hour meeting between party representatives and President Demetris Christofias, who decided on an initial austerity package to shore up the economy. It was also agreed to hold further discussions on short-term action taking into consideration the repercussions on the economy of the blast at the Evangelos Florakis naval base that killed 13 people and knocked out the Vassilikos electricity station causing rolling power cuts.
But DISY and DIKO walked out of the meeting yesterday – followed later by the other parties – accusing the government of failing to propose additional actions and withdrawing measures already agreed in last Friday’s meeting.
Finance Minister Charilaos Stavrakis responded in the afternoon saying the package was still on the table and the government was prepared to implement it though some measures, which concerned civil servants, had to be discussed with the unions.
The minister called a news conference where he read out a prepared statement and did not take any questions “so as not to pour oil in the fire”.
He said many things have been said “which in my view do not respond to reality” and pledged to continue to work towards implementing specific measures for the economy.
“We express regret that today’s (yesterday’s) meeting was interrupted and there were no results,” the minister said, reiterating the government’s readiness to have another meeting to attain the objectives set.
Meanwhile, rumours were rife last night that Stavrakis has already tendered his resignation and that the government was scrambling to find a replacement. Presented with these rumours by the Cyprus Mail, the minister said “no comment”.
Speaking from Athens last night, former finance minister Michalis Sarris said yesterday’s meeting was “clearly a fiasco” and a “last opportunity lost” to tackle the “very serious situation” facing Cyprus.
“It’s already after midnight. Even if we outdo ourselves (in immediate measures taken), there is no way we’ll have access to financial markets this year,” said Sarris.
In three months time, the ministry would likely appoint someone to perform an analysis on what went wrong with the economy and the lessons learnt, he added.
Asked to comment on speculation that he’s been approached to replace the incumbent minister, Sarris said he has received no indication of such a proposal or invitation.
Earlier yesterday, Stavrakis and the government found themselves on the receiving end of harsh criticism from parties that feel the government is afraid of the unions.
“It was with surprise today (yesterday) that all participants, apart from the AKEL representative, watched the minister essentially scrapping the first package instead of announcing new measures,” main opposition DISY deputy chairman Averof Neophytou said.
He said there was no reference to: scrapping unnecessary semi-government organisations, privatisation of the bourse, calculation of civil servants pensions based on last 30 months instead of last month and 2.0 per cent contribution by state workers towards the widows and orphans fund.
The €260 million saved from better targeting social benefits became €130 million while the 4.0 per cent contribution by civil servants towards their government pension became 2.0 per cent, Neophytou said.
The DISY official charged that the management of the economy by the government “during these critical times for the country” is characterised by mentalities similar to those that led us to the naval base tragedy.
Neophytou said the blast has saddled the economy with an additional cost of up to €3 billion and “it is a dangerous illusion for the government to believe that the package, which we deemed inadequate before the blast, is enough to save the economy today.
“It is an unprecedented political paradox for the opposition to ignore the political cost and insist on taking further measures and the government not only refusing… but also to scrap what was already agreed,” Neophytou said. “This is a dangerous and irresponsible policy.”
Neophytou warned that Christofias would now be unable to say that he did not know the dangers – as he did about the explosion – and he would not be able to shift the blame “refusing to assume his own responsibilities”.
Government coalition partner DIKO vice chairman Nicolas Papadopoulos echoed Neophytou regarding the measures and accused the government of irresponsibility.
In fact, the Cyprus Mail has learned that Papadopoulos exclaimed “you tricked us” three times before walking out of the meeting first.
Papadopoulos accused the ministry of bowing to trade unions “opting to disregard the unanimous national council decisions on the economy”.
“Unfortunately we see that some, instead of putting national interest before the party’s interest, choose to sacrifice it so that the party does not suffer any cost,” Papadopoulos said.
He said that his party was prepared to talk measures “when the government decides it has the political will and courage to take the responsible decisions necessary.”
Broadsides were fired by socialists EDEK, which charged the government with unacceptable diffidence and failure to rise to the occasion.
EDEK MP Nicos Nicolaides said it has now become apparent that the blame for imminent negative developments from the mismanagement of the economy “exclusively burdened the government”.
AKEL said it went to the meeting prepared to discuss additional measures “based on collective benefit and respect of social and labour institutions”.
“We expected that after Friday’s meeting there would have been understanding and collective effort to jointly arrive on measures to support the economy,” AKEL MP Yiannos Lamaris said.
He added that even now it was not too late to agree on the measures and urged parties to rise to the occasion.
