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Cyprus Finance Minister: Non approval of privatisation bill is dangerous

25 February, 2014

The financing of Cyprus` economy by the Troika of international lenders is the only option available at the moment and the non approval of a bill for the privatisation of semi-governmental organisations or even the adoption of a significantly amended bill may jeopardise and possibly halt the financing of the Republic of Cyprus, Minister of Finance Harris Georgiades warned on Monday.

In statements at the Ministry of Finance, Georgiades said that Monday`s incidents at the House of Representatives, which was discussing the bill, invalidated democracy, and furthermore said that threats to cut off electricity to homes and businesses were unacceptable and would lead the economy into new adventures.

Referring specifically to the Electricity Authority of Cyprus (EAC), employees of which demonstrated outside the House of Representatives, Georgiades reiterated that "the final decisions will be taken in four years from now", adding that in the meantime there would be specialised studies and possibly the restructuring of the organisation.

He said the House Committee on Finance would be continuing the discussion on Tuesday and pointed out that the labour and pension issues were not affected by the bill, which dealt solely with the process of privatisation.

Georgiades said "we all understand that the financing of the state, of our economy, by the Troika is the only one on offer at the moment".

"The non approval of the bill or even the adoption of a bill radically different from the one discussed with the Troika will jeopardise and possible terminate the financing of the Republic of Cyprus, and in that event there will be no plan Bs, but of course there are emergency reaction plans against the unbearably, dramatically difficult situation that will arise. Of course, I have no indication that things are leading there", he said.

During an anti-privatisation demonstration by Electricity Authority of Cyprus (EAC) employees on Monday, damage was caused within and outside the House. The Police struggled to contain the protesters. Windows were broken, power was temporarily cut off, and at least two people were taken to hospital. EAC employees will be going on strike again on Tuesday, including production personnel.

In late March 2013 the Cypriot authorities agreed with the European Commission, the European Central Bank and the IMF, collectively known as the Troika, on a €10 billion bailout. One of the bailout’s preconditions was the implementation of a privatisations plan covering the Cyprus Telecommunications Authority (Cyta), the Cyprus Ports Authority, and the EAC by 2018, to generate €1.4 billion in order to restore public debt sustainability. The bill should be approved by March 5.