RULING AKEL and coalition partners DIKO yesterday formally endorsed an economic recovery package agreed earlier this week between the parties and the government
By unanimous vote, the communist party’s Political Bureau approved the package, which is to be incorporated into the 2011 budget.
Meanwhile DIKO’s Executive Bureau also gave the nod to the measures. Party spokesman Fotis Fotiou said the party organ had voted overwhelmingly in favour.
The decision, Fotiou went on to say, proved “yet again that DIKO is a responsible force and that it plays a player in the country’s politics.”
The party said it would go into more detail after the Finance Minister’s presentation of the 2011 budget.
President Demetris Christofias similarly said he was pleased that a deal had been reached. “Of course I am satisfied,” he told newsmen.
Had the global financial crisis not lasted for so long, Christofias said, the Cyprus economy would have suffered no consequences.
Compared to other countries, Cyprus had “got off easy,” he added.
“Other economies and peoples are truly suffering. This has been avoided in Cyprus, because here…we are pursuing a sensible policy which has the people at its core.”
But right-wing union SEK was unhappy that wage earners would bear the brunt of the package, which provides for levying VAT on foodstuffs and pharmaceuticals and raising taxes on tobacco.
“The key characteristic of the measures…is the imposition of taxes that will be borne by ordinary citizens, while the wealthy and the corporations are left unscathed,” read a statement issued by SEK.
The union would today convene its top body to discuss the package and “announce decisions,” the announcement said.
The agreement hammered out at the Presidential Palace on Wednesday includes a pledge in the budget to reduce the number of civil servants by 1,000 each year for the years 2010, 2011 and 2012.
Regarding the contentious state payroll, it was agreed that €35m would have to be slashed annually. But this was left to the President to negotiate with the powerful civil servants union PASYDY, which is fiercely opposed to any talk of wage cuts.
It’s not clear how much headway the President can make with the union. Head of PASYDY, Glafcos Hadjipetrou drew the line in the sand yesterday, saying a review or “modernization” of the Cost of Living Allowance (CoLA) was out of the question.
The allowance – which is also given in the private sector – forms a significant portion of the annual wage increments of civil servants, whose salaries automatically increase by around six per cent every year.
“For years CoLA has preserved peace in the labour market…its role is to maintain the purchasing power of employees’ salaries,” said Hadjipetrou.
The union boss indicated, however, they were ready to enter a dialogue with the President on the planned €35 cuts to the state payroll, and that PASYDY would come up with some proposals of their own.
Hadjipetrou also told Stockwatch website that the union was in principle not averse to €40m worth of savings reducing overtime payments, operational costs and wasteful spending in the public sector.
“We are ready, and it is logical, to accept this,” he said.
