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Is President Christofias far more clever and far-sighted than we give him credit for or is he surrounded by a bunch of morons? There can be no other explanation why a whole administration refuses to take into consideration most of the IMF recommendations. Worse still, this government is hell-bent on introducing more regulation, even in the current semi-free market economy, as is the case of limiting shopping hours in tourist areas, that will harm our image as an attractive place to do business and lure highly skilled labour to our shores.
Over the years, successive governments (ALL share the blame) have also refused to consider reforming the uncompetitive wage-indexation system, COLA, let alone abolish it as the IMF has told us to, or reduce the civil service (even at a time of increased e-government). The reason has been very simple – fear that the whole body of civil servants, now exceeding 50,000, would vote against any candidate or his party and throw them out of office at the next elections.
This is also the reason why the Minister of Finance was too scared to even suggest a 10% pay cut on the EUR 2 bln state payroll for fear of a public uprising, at a time when private sector employers and employees (and subsequently taxpayers) have adopted a freeze on their wages to ensure that companies remain viable and ensure they have a job to get to the next day. Instead, he took the safe bet of asking cabinet member to take a pay cut, an example followed by parliamentarians. Could they do otherwise?
Civil servants grumble that the entry-level wages are very low. However, they do not reveal what small fraction of state employees make up that “low wage earner” class. They also do not care to share with us some of their other benefits, such as six months of unemployment benefit after they retire and start receiving a pension, cheap loans for housing or consumer spending, free medical care at state hospitals (regardless of income bracket), subsidised holidays, and much more.
If the government were to maintain the wages of the low wage earners and slap a 10% cut on the salaries of the remaining 95% of civil servants, then our economy would be in a far better state.
Unless, of course, we have underestimated Mr. Christofias and he plans to push the economy into a tight corner, forcing the civil servants to accept all the reforms and changes that we need in order to put a cap on public spending. Highly unlikely?
