The Cabinet has authorized the Minister of Finance Harris Georgiades to further study and discuss with stakeholders any measures needed in the public sector, said government spokesman Nikos Christodoulides after Cabinet meeting.
Trade Unions in Cyprus have announced their decision to go on strike Friday to protest the possibility of further cuts in salaries and the taxation of a one off bonus allocated to public sector employees upon their retirement. As Christodoulides said, the measures do not necessarily involve the taxation of pension benefits.
Christodoulides said that the Cabinet decision has taken into account the need for long-term sustainability of public finances, ensuring the public payroll, the pensions and the state`s ability to support growth and social cohesion.
"Therefore, the Cabinet considers that the decision on taking strike action was hasty and calls on trade unions to respond positively to the invitation of the Cabinet, to discuss the concerns of the Ministry of Finance in order to avoid unnecessary inconvenience and problems that may arise from a decision taken on the basis of a false impression," he said.
According to reliable sources, the measures that the Minister of Finance intends to discuss with trade unions concern the targeting of social pensions, the expansion of the public sector`s contribution to health care and the review of the way of payment of the a one off bonus. At the same time any extraordinary contributions to the public servants salaries will not be permanent.
The 2015 state budget, presented Tuesday to the Cabinet, takes into account the fact that the Republic of Cyprus is still in a bailout program, although there is already some substantial potential to stop depending on Troika`s (EC, IMF, ECB) lending, said Government Spokesman, adding that this is the Government`s target.
Christodoulides has said that next year`s budget broadly reflects the correction of the public finances and the need to continue fiscal consolidation effort, while putting emphasis on the policy priorities relating to the co-financed development projects, as well as policies for social cohesion.
Asked why he is optimistic that Cyprus will stop depending on Troika`s lending, the Spokesman said that the strict implementation of the program has surpassed the expectations of the Troika, and allows optimism, based on real data.
