EDITORIAL: At last, somebody in Cyprus makes sense

545 views
1 min read

.

It was quite a long wait, but we finally heard some sense from the Finance Minister as regards the enormous public payroll, the high cost of pensions and the over-privileged civil servants.
“One of the possible solutions is to change the pension plan for the newly hired employees in the public sector and the semi-government organizations”, Charilaos Stavrakis said on Monday.
With more than 30% of public spending on wages pumped into pension plans, the Minister wants to reduce the cost on the state purse in order to keep spending in control, even going as far as to suggest that these pensions should be aligned with those in the private sector, where provident and retirement funds earn significantly less.
Although this is a mild move so as not to upset the militant trade unions, such a plan will in fact help reduce the budgets of government services and semi-government organisations, that will hopefully make them more efficient, with the state-owned telco, CYTA, being the first headed in this direction.
This change is music to the ears of the employers and business chambers that have been fighting to contain wage increases, but always face the adamant union leaders who cite the example of the civil service whenever they put forward ridiculous demands.
Calling for a ‘structured dialogue’ on this matter finally removes the subject from the taboo list that private, public and banking unions have hung on to over the years. This is also a hint that the government may consider negotiating with the smaller and more flexible unions, before allowing the larger labour groups to flex some muscle.
Justifying his thoughts that public services are facing acute competition from the private sector, Stavrakis said that the power utility, EAC, too will have to contain its spending in the face of growing competition as energy supply is liberalised.
The Minister maintained that the rest of the privileges enjoyed by public and semi-government employees are so generous that a common solution could be found, paving the way, perhaps, for new more flexible trade unions cropping up.
Even some unearthly demands for secretly managed ‘welfare funds’ and the likes could be abolished along the way.
With Stavrakis wisely preparing the ground for more far-reaching reforms, it is only a matter of time that we see more radical solutions being proposed for the Social Insurance Fund that will ensure that future generations will have a secure pension once they reach retirement age.