Cyprus Editorial: Summer slalom (without the snow)

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Imagine putting on your skis and getting ready to go down the North Face slope at Troodos, only to discover after you take off that there is no snow, but only the jagged rocks sticking out of the ground and dry broken branches poking in your sides.
This is probably the best way to describe the economy right now, that is on a path of no return and reaching the finish line includes a generous dose of bruises and broken bones, if not death.
The public sector deficit nearly doubled in the first half from 1.9% of GDP this time last year to 3.5%. Growth has come to a halt, state revenues shrank by 0.3%, but expenditure rose by a whopping 9.2%, which goes to show that, according to the Employers and Industrialists Federation, OEV, this administration has failed to contain its costs, despite reassurances of the opposite.
The Federation said that drastic measures should be taken immediately in order to (somewhat) improve public finances by the end of the year. OEV said that its members act socially responsibly and are ready to take a share of the burden, but it added that a reckless state that does nothing to contain its costs cannot be supported.
The biggest obstacle to reforms in the public pay system, pensions and other privileges are the outdated views about “safeguarding the rights” as imposed by the powerful civil servants’ and other unions.
Even the Bank of Cyprus, in an unprecedented move not seen for more than a decade, issued a statement following the twin downgrades by Moody’s and Standard & Poor's last week and a downgrade threat from Fitch on Monday that “markets and the rating agencies, whether right or wrong, play a key role in major events and it would be catastrophic to ignore them at a time when all of the Euro zone accepts their influence and determines new policies that aim to appease the markets.”
“Through our inaction, we are risking the prospect of refinancing the state and the consequences will be immediate and dire. There is a real threat of joining the EU support mechanism, with all the negative repercussions,” Bank of Cyprus said, adding that in the long term the island could lose its status as a regional business centre within a ruthless international environment.
Moody's said it would consider a rating upgrade if Cyprus introduced sweeping structural reforms in its social transfers system and public sector wage bill, and recorded significant and lasting cost savings. S&P warned another cut was possible, deepening economic gloom for the island struggling with its worst peacetime disaster and mounting speculation it might be forced into an EU bailout.
In addition to the burden of rebuilding the energy sector after the Vassiliko disaster, economic sentiment dropped further in July and unemployment rose to 7.4%.
So, where are the bright political leaders who rejected the central bank Governor’s warnings over a year ago of an impending economic crisis, not considering the cost of the Mari meltdown. Perhaps some politicians and party leaders ought to be brave enough and apologise to the nation for lying, cheating and in general giving a skewed picture of the economy.