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Our comments about the harm that cowboy economists are causing by their mindless and often childish comments on TV and radio chat shows have fallen on deaf ears – these people are causing greater harm to the island’s banking sector and, potentially, to the formerly thriving financial services sector, than anything else before.
The worst example of this double-speak is the Finance Minister (former banker) and the Central Bank Governor (economist) talking about what should be done, when and how, while the government spokesman and the whole communist administration (non-economists) insist on sticking their heads in the sand and saying “the European Stability Mechanism will go away and we can escape a rescue fund.” Sort of like the stupidity blurted by Syriza that could probably be the single largest catastrophe in Greece since World War II.
Saying that joining any rescue mechanism would be “solely to bail out the [greedy] banks” and ignoring the austerity measures that have not yet been implemented to reduce excessive public sector spending (ie. slashing the civil service payroll) is naïve, to say the least. But when you have the government spokesman telling women party leaders at a conference that anything to the contrary “is a lie”, shows just how off-target and economically ignorant this administration really is.
The 200 mln euro shortfall that the Finance Minister said needs to be recouped will only pay for the public sector’s obligations for the rest of this year. Even the much-advertised kissing and hugging with the Triple 5 executives, who, our officials had said would pump some 500 mln euros into the economy by buying government bonds, seems to have vanished into thin air with little hope of finding any fresh funds, apart from mortgaging future gas revenues.
Parts of the Cyprus civil service are efficient and cost-productive. Other sectors, however, are simply counter-productive and loss-making, by private sector standards.
Under the current circumstances, abolishing COLA, cutting wages and taxing retirement bonuses will not go down very well, but these are necessary measures that will keep the government afloat a while longer. Once these are done and other austerity measures and state assets selloffs are underway, we can start talking about the future.
