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By Antonis Loizou F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate & Project Managers
Despite my long history in the property sector, I will never cease to be surprised by this state.
We hurried to get out of the supervision of the Troika and three months after the unions have once again started demanding pay increases. I do not know the reason for this rush by the state, except for political purposes, perhaps to looking ahead to presidential elections after two years. Various political parties have also joined to support these claims, "since it was the employees helped businesses recover." In that case, what about the 3,500 businesses that closed down because of economic hardship?
It seems there is hyperinflation that has caused an increase in the purchasing capacity to 6% from the previous period. In that case, will we see a relevant drop in wages as well? Where did the former Labour minister Sotiroulla Charalambous find the money to support such demands in the past? And the tragedy is that the demand for increases comes primarily from the civil servants and other public groups, but not workers in the private sector who have suffered wage cuts of 20-30% and layoffs.
• There are also the 40,000 unemployed in the private sector and thus the pay rises pursued by the unions (partly they will succeed) will again be at the expense of the economy by increasing the gap between salaries and revenues of the public and private sectors.
• The burning issues of the NHS, the semi-government organisations and others that the Troika rightly pointed out that they remain unresolved, while the main tax evaders (doctors, lawyers, etc.) remain untouched.
• Did the Government actually try to introduce new measures to attract new investors based primarily on real estate investments (earning foreign exchange of around EUR 3 billion, according to the Ministry of Interior)? On the other hand the same measures have been contradictory, and the general problem of bureaucracy (see EDEM project and others) remains despite the intervention of the President without any response from local officials.
• Have you had any experience with the Registrar of Companies? Well, we had an unforgettable experience when we asked four months ago to change the company's directors and after we went through incomprehensible requirements we got the relevant document four months (in Malta it takes three days).
• The primitive processes in the course of issuing title deeds remain so, while the Law on common expenses (I call it a curse) also remains.
• The Auditor General, despite all his good intentions, has become the "fear and terror" of the Public Service, where at the end of the day no one takes any responsibility for any decision, even the senior directors, as well as certain ministers (see case of foreign investor of EUR 300 million who does not know what to do and finds himself trapped), while the most recent observation for "bad" compromise agreements on taxation (the only recovery method) will freeze this process of tax collection as well.
• The Law on the release of buyers has also been frozen by the lawyers and some banks and nobody knows where this will go.
• Meanwhile, the benefit of multiple pensions remains in place and despite being identified by the Auditor General, he still awaits for instructions from the Minister of Finance.
I has written previously on this page "Who loves Cyprus?" I believe that none of the older politicians and even the new Members of parliament care as they too have become like their elders.
I predict that because of the unions and additional demands these will take us back. The fault of the haircut on deposits was primarily on Parliament, while the ringleaders of the situation (the previous government) comes out in the media to explain without shame that not it's fault.
I suspect that after the EU realised that we are not serious it will soon be back with new measures.
Let me conclude with various announcements by each Government regarding that "Cyprus will become the centre in various fields,":
(i) In the financial services sector – the results are known – simple destruction – even Mr. Putin pointed to Cyprus as an example to avoid.
(ii) The failure to become a medical centre (see as an example the cost of a heart by-pass which costs less in Germany than Cyprus).
(iii) The failure to become a higher education centre with the occupied territories already having 100,000 students, while in the Republic that number is closer to 10,000 (with universities without proper recognition).
(iv) Centre international dispute resolution (arbitration). No one believes us any more, hence this is also doomed to failure.
(v) Attracting foreign tourism? Apart from our previous reports of taxi drivers who seem to control the traffic at the airports, including their beating of an Australian tourist in Ayia Napa, we are seeing bills of five euros for a lemon in a restaurant in Peyia and 35 euros for a bunch of grapes in Protaras.
With all these, it is obvious that the Troika will return soon.
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