Cyprus Mail
Opinion

Our View: No surprises that outside forces being allowed to decide CY fate

SUCCESSIVE governments appear to have one way of dealing with difficult problems that require unpopular decisions – avoiding taking any decision until conditions provide a solution, usually the worst possible.

That was the mantra of the previous government and we will be paying for it for many years to come. It could have signed a Memorandum of Understanding in mid-2011, when Cyprus was excluded from international markets, and it could have done so in July 2012 when the troika submitted a proposed draft, but instead chose to wait. By December, when it was supposedly ready, the banks’ situation and the economy had deteriorated so much we had to accept the worst possible MoU to avoid a total collapse.

The restructuring of the Bank of Cyprus has also been dragging on, even though the Central Bank, as the resolution authority, is more to blame than the government in this respect. More than two-and-a-half months after the restructuring begun, the bank has still to close down any of its 200 branches, cut wages and give redundancy letters to staff; it is still paying some 2,000 employees it inherited from Laiki and operating all the latter’s branches, thus eating up more and more of the uninsured deposits that were bailed in. By the time these decisions are taken, there may be nothing left to save.

This is looking increasingly likely in the case of Cyprus Airways, with the Anastasiades government following its predecessor’s policy of avoiding taking a decision. The experts’ rescue plan which envisaged laying-off some 500 employees was ready last October. It is now mid-June but we are still waiting for the decision on the redundancies, the unions holding out for additional compensation, which the government stupidly promised on behalf of the bankrupt company.

That was two months ago. Since then, the previous board resigned, as it could not find the €20m needed for the compensations. The new board, appointed by the government, has also made it clear it does not have the funds to pay the compensations being demanded by the unions, which were meeting on Monday to decide what action to take. Redundancy notices were meant to be handed out to 200 people yesterday, but the unions tried to secure a postponement until Thursday, when their representatives were to discuss the matter with the president.

Is it so difficult for the government to back the airline’s board, telling the union bosses and employees there would be no additional redundancy compensation, and that if they chose to strike, there would be no company for any them to return to when they called off the strike? Had this been done last October, the airline might have had a future now. Had it been done in April it might have had a chance of survival, but the government chose to delay any decision by promising the €20m it knew was not available. It looks like a decision on Cyprus Airways’ future will be imposed by outside forces, as in the case of Eurocypria.


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