No helping hand in cost-of-living crunch

3 mins read

If you believe the Finance Minister, the government is pulling out all the stops to buffer the cost-of-living crisis that’s washing away our purchasing power.

Real salaries are worth less than government promises as energy costs soar while food prices are sprinting to catch up.

Defenders of the government say the economy is resilient and growing much faster than many other eurozone countries.

And prospects for the next year are upbeat while inflation is running much lower than the record double digits we endured last year.

But inflation, food prices, and power bills are ballooning way beyond salary increases, if any.

Although this administration likes to make us believe its finger is on the pulse of a price onslaught, it seems unimpressed with the daily burden the Cypriot consumer must carry, whether at the pumps or the supermarket.

The minister argues that the government has intervened and is doing everything possible while state subsidies must be targeted.

Few seem to benefit from the government’s proclaimed social conscience to keep people cool in the summer and warm in the winter.

Its social policy doesn’t reach very far if a sizeable number of Cypriots say they can’t afford to stay warm or avoid the air conditioning in blistering heat because of the cost.

Instead of investing in green and renewable energy, the electricity authority still uses petrol-guzzling power stations that cost a fortune because the EU keeps fining Nicosia for generating ‘dirty power’.

We still haven’t figured out how to build a gas infrastructure, invest in solar power and ensure all buildings are properly insulated and energy efficient.

Such long-term planning doesn’t win you popularity and demands a clear vision of a sustainable future, something beyond the grasp of politicians.

Moreover, the world will have moved on by the time Cyprus can commercially extract natural gas from its offshore reserves.

Currently, the plan doesn’t work for the oil conglomerates until they can juice press more out of the government so their profit margins widen.

Runaway rents

While the government follows its dream of becoming a tech, health and educational hub – it has forgotten all these shiny companies need to hire staff that can afford to pay runaway rents.

On top of everything else, the property market is a hostile environment for those trying to start a family or climb the career ladder.

It seems the only accommodation available is either beyond your price range or hasn’t been built yet.

Once you’ve overcome the obstacles of rising rents, stagnant salaries and embedded inflation, the bank would like to kick down a few flights of stairs.

If securing a bank or a mortgage was difficult after the banking crisis, prolonged interest rate rises make loans harder than pulling out your teeth.

As lending money has become much more expensive, the banks just have to park their cash and watch their profits accrue while everything has become more expensive in the blink of an eye.

Some politicians would like to redress the balance by introducing a windfall tax on huge bank profits that could be redirected to addressing social causes.

For now, the government says it expects the banks to do the right thing and help reliable borrowers through these tough times.

I’m not sure which reality they are living in, but it is not where the banks start reliving the legend of Robbin Hood.

Unless they feel a public backlash for their greed, they will continue hoarding, overcharging and offering the lowest deposit rates in Europe.

And what they have heard from the government so far will not frighten them into giving back.

Announcing the 2024 state budget this week, the Finance Minister cautioned that the government must be prudent with its expenditure and not play poker with the economy.

So that doesn’t leave much room for social intervention to ease the cost-of-living misery.

Being prudent with government finances didn’t bother ministers when they agreed that civil servants would receive their automatically adjusted cost of living allowance in full.

A benefit that many in the private sector do not enjoy.

Cypriots may feel they have weathered the storm of supply chain shortages, rampant inflation and eye-watering energy bills, but a hefty price has been paid.

We are getting less for more; there’s no putting that back in the box.

Nevertheless, if Las Vegas police can solve the Tupac Shakur 1996 drive-by shooting, somebody might find traces of the government’s policy to keep us from the wolves.