After touring other districts to announce the government’s spending plans for each one, yesterday President Anastasiades met the mayors of the Nicosia municipalities to inform them about how much money they would be receiving next year. Elections are the time for generous government spending and it seems Anastasiades is determined make up for the lost years of the memorandum when there was little money in state coffers and the Troika imposed drastic restrictions on state expenditure.
Every time he announces new projects people must be wondering where all the money will come from and worry that we are returning to the Christofias profligacy that eventually bankrupted the state. There may be a healthy rate of growth and tax revenue may have increased, but the reckless spending we are witnessing cannot be described as prudent financial management. It is as if the crisis of 2013 and the ensuing recession never happened and the big public debt does not need to be serviced.
Perhaps these are just election promises the government has no intentions of keeping if Anastasiades is re-elected. If he loses, the implementation of the projects will be his successor’s problem. But the policy of profligacy has other negative consequences. It creates the impression that the state has unlimited funds and encourages public employees to make pay demands. In the last few weeks unions representing different groups of employees have submitted demands for pay rises.
The first group was the contract workers, with their unions arguing that the state finances had improved significantly and pay rises were due. Finance minister Harris Georgiades responded with an ‘absolutely not’, prompting the unions to threaten strike action. On Monday the three teaching unions wrote to Georgiades, urgently demanding a meeting in order to settle several financial matters. This included the re-examination of teachers’ pension benefits, the pension benefits of newly-appointed teachers and the lifting of the 0.8 to 2 per cent pay cut to cover the extension of supply teachers’ contracts, among other things.
These might not be big pay demands, but they are a sign of what to expect now that the president has decided to show off his government’s generosity. The way he is announcing new spending plans every few weeks creates the impression there are unlimited funds available. If the government has so much money to waste on helping Anastasiades’ re-election drive, why not give pay rises to public employees as well? A perfectly reasonable question, which there is every chance Anastasiades will answer in the affirmative. The wasting of taxpayers’ money has become synonymous with presidential elections.