“The finance minister has made it clear to us that the privatisation plan will go ahead and be ready by the end of December,” said Alecos Tryfonides, representative of PASE ATHK, a trade union that represents around 35% of the staff at state telecoms company CyTA. The plan is necessary for the release of the next tranche of bailout money from the Troika of international lenders and Cyprus must complete the legal framework that will govern the plan by the end of January. According to the terms of the bailout, Cyprus must raise some €1.4bn from privatisations between 2016 and 2018.

The minister held meetings with trades union leaders to discuss the plan. Tryfonides said Georgiades left open the prospect of other sources to be found for the €1.4bn. The government “expects us to propose any alternatives if we have them,” he said. “We will take the chance to study some other ways,” he added. One proposal the union was looking into was a voluntary retirement scheme that will save around €250m in three years.

The union representatives told Georgiades that they could not come up with alternatives without the ministry’s cooperation but they were told that the state had looked into such options and that none were feasible. Tryfonides said workers will come up with ideas in a bid to avoid privatisations.

The International Monetary Fund, one of the three lenders that comprise the Troika, has said that privatisations were not aimed just at raising cash. “Privatisation is an important component of the adjustment programme. Its objectives are not only to help to provide financing to the state over the medium term, but even more importantly to increase the efficiency of the economy as resources are transferred from the state to the private sector, which helps to spur competition for the benefit of the consumer,” IMF mission chief for Cyprus Delia Velculescu told the Sunday Mail in an interview.

PEO, a leftist trade union affiliated to the former ruling party AKEL, threatened with “mass and combative” mobilisation if the government went ahead with privatisation plans. “PEO will not remain indifferent; we will not go home. We will react; our reaction will be massive and combative, in cooperation with other worker and social organisations,” union boss Pambis Kyritsis said. He suggested that privatisations under the current terms would lead to a fire-sale, adding that the cash they expected to raise did not correspond to the real value of those organisations nor their potential. “We are ready to discuss with the government, not how the privatisations will be done, but ways to avoid them,” Kyritsis said.

He rejected suggestions that it was the previous administration that agreed to privatisations, saying the provision in the November 2012 memorandum with the Troika was linked with the sustainability of public debt. The provision said: “If necessary to restore debt sustainability, the Cyprus authorities will consider a privatisation programme for state-owned and semi-public companies.” The debt was later deemed unsustainable.

Source: Cyprus Mail