IS THERE any good reason why bank employees should pay the lowest interest rates in Cyprus? Are they an impoverished class of citizens who need to have the interest rates on their loans subsidised by the banks or is there some provision in the constitution that entitles them to this privilege? The answer to all the above is ‘no’. This privilege is what union bosses call a ‘workers’ conquest’ that cannot be given up because it has become a ‘right’ of its own.
The banks had argued against the continuation of this privilege in their negotiations with the trade union Etyk, because it was a significant cost, but the union refused to budge. It remained in the new collective agreement that was finalised last week, indicating that Etyk’s power remains undiminished. It also showed that bank boards were as weak and cowardly as they had always been, unable to stand up to the union even at a time when they were fighting for survival. They also agreed the extension of the retirement age to 65, as the union had been demanding, despite the additional cost.
On housing loans, bank employees will carry on paying a privileged interest rate of 0.58 per cent, compared to four or five per cent paid by customers and on other loans one per cent compared to the seven or eight per cent the rest of us are paying. The banks are effectively subsidising these loans as they pay interest of 2.5 and 3 per cent to secure funds. In short, employees were paying one fifth of the interest the banks were paying, which is not very smart business practice, especially in such difficult times for the sector. A provision was included in the agreement that staff loans would be negotiated in the next four months, but nobody would be surprised if Etyk refuses to budge.
Has nobody at Etyk considered that this arrangement is a provocation to all bank customers who are obliged to pay extortionate interest rates in order to keep the banks afloat? With interest rates so high, they could bankrupt businesses and individuals. We are being fleeced in order for bank employees to keep their jobs and, adding insult to injury, we are also subsidising the interest they pay on their loans. This shows great respect for the beleaguered customers of banks who have lost their deposits and for one year have been unable to withdraw what money was left in their accounts in order to help the banking sector survive.
The bank employees have shown their gratitude by insisting that the customers carry on subsidising the interest on their loans. This is a scandal that shows how close some workers’ ‘conquests’ are to theft.