PLAIN STUPID! Cyprus strikes ground flights, austerity voted

Civil servants continued their protests for a third day, objecting to parliament passing austerity measures that aim to reduce the public sector deficit and get the cash-strapped government out of the current economic crisis.
Air traffic controllers extended their strike by two hours on Thursday morning, causing havoc at Larnaca and Paphos airports where more than 70 flights were grounded, leaving more than 5,000 passengers stranded in Cyprus and abroad.
Akis Vavlitis, chairman of the hoteliers’ association ACTE said that “such actions can only cause harm to the vital tourism sector.”
Police and government officials failed to control the few hundred strikers who gathered in front of parliament blaring horns and blowing whistles in order to interrupt a debate of the state budget for 2012.
The employers’ federation OEV said the strikes were “irresponsible and a blow to society and the national economy.
“The actions of Pasydy (the civil servants’ union) is an insult to the 31,000 people who remain our of work,” OEV, said, adding that public sector workers will will receive their wages and 13th month bonuses at the end of December, while others are struggling to make ends meet.
The House of Representatives eventually passed the first set of measures on Wednesday that include a two-year pay freeze for public sector workers, a rise in VAT from 15% to 17% in March and a 3 point rise in the dividend tax to 20%, that will save the government some 230 mln euros a year.
Other measures include cuts to child and student benefits, an overhaul of the COLA wage indexation system that benefits high-income earners and increased contributions by civil servants into the Social Insurance public pension fund.
Thousands of workers observed the strike on Thursday, which left emergency services like hospitals with skeleton staff and threatened to disrupt municipal elections on Sunday, December 18.
The strike, called unexpectedly on Wednesday just before parliament approved a new economic austerity package, is an awkward challenge for the communist-led government, deeply rooted in labour activism.
Finance Minister Kikis Kazamias said he regretted the civil servants' decision to strike.
"I am saddened. Today I was waiting for approval of the budget to send a formal message to Brussels that we are implementing what was promised, and I had wanted to underline the political and labour consensus," he told CyBC state radio.
The 2012 budget seeks to slash the deficit to 2.4% of GDP from a projected 6.0% this year, with zero growth forecast for 2011 and next year as well.
The 17 bln euro economy has suffered from recession, fiscal slippage and exposure of its banking sector to Greece. It has been unable to access international capital markets since May, and recently announced it would obtain a 2.5 bln euro loan from Russia to help refinance debt maturing next year.
According to the IMF, Cyprus has the highest public sector payroll in the euro zone as a proportion of output, costing 15.4% of GDP.
With clerical staff on strike, parliament approved the austerity package on Wednesday in a plenary session in which lawmakers had to shout because microphones had been switched off, while MPs used voice recorders in order to minute their debate. Thursday's budget debate was expected to continue without staff.