Cyprus & World News

Hung parliament rejects Cyprus privatisation bill

27 February, 2014

The Cyprus parliament rejected a crucial privatisation bill on Thursday night, jeopardising the fourth tranche of a bailout package from the Troika of international lenders.

The bill, that would have seen the state telco Cyta, power generator EAC and the Ports Authority partly or fully privatised by 2018, would have raised some EUR 1.4 bln as part of a plan to reform the public sector and slash government spending through runaway costs at the semi-government organisations (SGOs).
The fourth tranches would have been EUR 254 mln (150 mln from the European Commissiona dn EUR 84 mln from the IMF), as part of the greater 10 bln euro bailout package to the Cyprus government.
The bill, that had been expected to pass with a thin majority, faltered as five key MPs from the former coalition partner Diko abstained, probably under pressure from the militant trade unions that have staged protest strikes for the past weeks, causing havoc to electricity supplies, port movement and telecoms.
In the end, the bill was blocked by 25 votes in favour, 25 against and five abstentions.
The ruling Democratic Rally (Disy) MPs voted in favour, together with centre-right Democratic Party (Diko) leader Nicolas Papadopoulos, Sophocles Phittis and adn Yiorgos Prokopiou, as well as Evroko leader Demetris Syllouris and independent Zacharias Koulias, regarded an unlikely vote as he has constantly criticised the administration on everything from efforts to solve the Cyprus problem to handling of the economic crisis.
Disagreements over the national issue were also the reason for Papadopoulos to push for Diko to abandon the coalition, but had pledged to support the privatisation bill as long as it was amended to include safeguards such as greater say by parliament and the trade unions in the decision making process.
However, the surprise came from the other five Diko members who abstained from the vote, previously considered as pro-administration supporters of the coalition: Marios Karoyian, ousted as party leader by Papadopoulos a month ago, as well as Angelos Votsis, Athina Kyriakidou, Antonis Antoniou and Phytos Constantinou.
The 25 MPs of the communist Akel, the socialist Edek, the Greens’ George Perdikis and Nicos Koutsou of the Citizen’s Alliance opposed the bill.
The bill ought to have been passed the latest by March 5, in time for the Eurogourp meeting of Eurozone finance ministers on
It is not now known if the fourth tranche of the bailout money will ever materialise and how the government plans to fill the gaping hole in its budget, primarily to service some loans and pay civil service wages.