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Our View: Malas’ economic ideas discredit his ‘independence’

Stavros Malas said abstention on Sunday should not be an option

Stavros Malas may claim to be an independent candidate backed by Akel but his ideas about running the economy are no different from any member of the party’s Central Committee. He sees a big, interventionist state as the driver of growth, creating jobs, fixing wages and commandeering the banks, among other things. He seems happy to recycle Akel’s discredited ideas about a state-managed economy by giving them a veneer of modernity and claiming that his priority is to protect homeowners and small businesses that cannot repay their bank loans.

In this respect he is no different from his main rival Nicolas Papadopoulos who also wants to protect the middle classes and homeowners with NPLs. In fact, he is more restrained, not claiming he would compensate all the haircut victims, like Papadopoulos, but acknowledging that there were limits to what the state could spend. But the way he would deal with NPLs – forcing the commercial banks to fund a bad bank that would manage bad loans – is only marginally less unrealistic than Papadopoulos’ promise to arrange a haircut of loans.

It is when it comes to the proposals for the labour market that Malas shows his Akel colours. Speaking on Trito on Tuesday, the independent candidate sounded like a senior official of the Peo union federation. We are living in “industrial middle ages,” he said, and pledged to introduce a minimum wage by law, which would be calculated by technocrats because the wages being paid at present were extremely low. No mention about demand and supply determining wages, because in an Akel economy the state sets wages.

It should be recalled that the Christofias government’s labour minister Sotiroulla Charalambous raised the minimum wage when the country was entering a recession and helped boost rising unemployment. Malas wants to do the same at a time when the real economy has not recovered and businesses are still struggling – points he has repeatedly made in criticising the government’s economic policy. So while the small businesses that Malas claims he wants to save are struggling to repay their bank loans he will also lumber them with higher wages by law.

To end the “industrial middle ages,” he will also bring back the collective agreements that were abandoned during the recession. These may work in the public sector, but in the private sector these agreements are economically irrational as they impose the same wages and pay rises across industries, regardless of productivity or the financial condition of different companies. Will this help the small business he wants to protect to survive? Of course not, while his idea of offering incentives to companies that adopt collective agreements will penalise the struggling ones.

These discredited economic ideas might endear him to the Akel faithful but will not win him many new votes. Perhaps nobody has informed him about the opinion polls that show the large majority of people do not trust Akel on the economy – and with very good reason.


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