.
Perhaps trade union officials have not yet realised that Cyprus now has its back to the wall and there is no way forward apart from severe austerity measures. Going on strike does not help.
Our own central banker issued a stern warning to MPs and said that due to the fiscal deterioration we have lost credibility in the market and access to cheap funds. And the only way to win back investor confidence is to proceed with a sound fiscal consolidation plan.
Ironically, Standard & Poor’s did not bother to include Cyprus among the Euro zone members facing a downgrade because, quite simply, we already are on “downgrade watch.”
If President Christofias fails to secure union approval of the admittedly short-term austerity measures by Thursday, in time for the leaders’ summit on Friday, then we will once again become the laughing stock of Europe, criticised for being hostage to union strong-arm antics and stubbornness.
Efforts to halve the deficit from what it is today, to at least match the Eurozone’s benchmark 3% limit, cannot succeed without the cooperation of the trade unions, both the private sector Sek and Peo and the civil servants’ Pasydy. Cuts have to made and the ruling administration must find the courage to push through with the plan, because negotiating towards a third austerity plan and others down the road will put Cyprus on the “bad” side of the Eurozone scale.
We have said that growth is the way forward coupled with strict implementation of austerity measures, as long-term as possible. This will help revive competitiveness and even find ways to reward those deserving civil servants who reach beyond their strict job description.
The labour market should be allowed to regulate itself, first by freezing all new recruitment to the government machine for a few years, which will ultimately lead to a balancing of wages, as the private sector undertakes more public projects and starts to pay better than what it does today. Only then can we talk about reinstating some of the privileges that the public sector employees enjoy nowadays, to the detriment of their private sector colleagues.
A more transparent and professional civil service will eventually become an attractive career for young professionals to look to. But not now. Maybe far, far into the future.
