THERE SEEMS to be no limit to how much money the government is prepared to waste in order to secure President Anastasiades’ election. Much of the spending will start next year, after the elections, but it does not make these decisions any less worrying. The fact is that the old practices of irresponsible spending that led the state to bankruptcy, only a few years ago, have returned. The president is incapable of uttering the word ‘no’ to unions and other interest groups, thinking that reckless spending will secure his re-election.
On Wednesday the Council of Ministers approved a supplementary budget of €44.2 million for the Electricity Authority of Cyprus (EAC), which was sent to the House on Thursday for approval. A large chunk of this money will go on buying crude oil, but what is left will go towards satisfying union demands for 24 new positions and the reopening of over 60 positions that were frozen because of the crisis. The EAC unions had been to see the president the previous week with their demands and, seven days later, these were satisfied.
This week the representatives of the teaching union Poed met finance minister Harris Georgiades. Not surprisingly, the teachers’ demands were satisfied. The government agreed to the gradual lifting of the pay cuts imposed on teachers, with a May 2018 deadline set for reaching an agreement. Georgiades also said ‘yes’, in principle, to the discussion of the ‘early retirement without financial penalties’ demand of the teachers. Until now, public employees that opted for early retirement received a smaller pay-off or pension.
All the work done to put public finances on healthy footing, on the advice of the troika, during the assistance programme, is methodically being destroyed by the government that undertook it. Should we mention the pay rises promised to hospital nurses and doctors next year, the paying off of the debts of municipalities by the state, the building of the Paphos-Polis highway or the cash handouts to assorted pressure groups? Anastasiades appears to have adopted the Christofias philosophy of economic management.
It is a shame that Georgiades, who has built a reputation for economic prudence and caution, is going along with the president’s indefensible, vote-buying expenditure, because the economy is doing well, with tax revenue increasing. The economy was also doing well when Christofias was elected and started throwing away the taxpayer’s money. Why is Georgiades, who knows how quickly things could change in an economy – factors beyond our control could hit the tourism industry next year without any warning – not making this point an applying the brakes to the president’s irresponsibility before it is too late?