Cyprus broadens officials’ pay cuts to battle deficit

Cyprus's finance ministry wants dozens of senior state officials to accept a 10 percent pay cut as the island state battles a widening deficit, a newspaper reported on Wednesday.

Cyprus is trying to cuts its fiscal deficit, which is seen spiking to around 7 percent of gross domestic product this year after poorly performing tourism and real estate market sectors tipped the island into recession in 2009.

Cypriot President Demetris Christofias and 12 members of his cabinet agreed to a 10 percent pay cut last month.

Finance minister Charilaos Stavrakis has asked state officials ranging from Supreme Court judges to the auditor-general to accept a 10 percent pay cut for 24 months, the daily Politis reported.

"We believe this will give a strong message to all social partners to exercise restraint in their own financial demands," it quoted Stavrakis as saying in a letter sent to senior state officials. The letter did not give recipients much of a choice — an annex to the cover letter asked recipients to sign and return it to Stavrakis as soon as possible.

The move would save the state one million euros a year.

Authorities still need to get powerful labour unions on board in their attempt to broaden savings in the public sector. Collective working agreements are up for renewal this year.

A finance ministry official confirmed the letter was dispatched to officials on April 6, and more were scheduled to be sent out on Wednesday.