Cyprus Mail
Cyprus

DISY calls for deeper public sector cuts

By Stefanos Evripidou

RULING PARTY DISY on Friday called for a further shrinking of the wider public sector, noting that Cyprus had the most expensive public sector in the eurozone as a share of its GDP.

DISY pointed to “positive” data released by the Statistical Service last week showing that employment in the wider public sector saw a decline in the first quarter of 2013, compared to the same period the year before.

However, the figures for employment in the civil service, central government and local authorities, when compared to the first quarter of 2009 when Cyprus started to feel the pinch of the economic crisis, actually show an increase.

“This shows us that despite the very positive trend of declining employment, there is still a way to go to make sustainable our public service and in general the wider public sector of the country,” said the DISY statement.

The ruling party highlighted Eurostat data showing the cost of Cyprus’ central government payroll, excluding semi-government organisations, which came to 15.8 per cent of the country’s GDP in 2012.

“And that was the highest percentage in Europe compared to GDP,” said DISY.

The average cost of the government payroll in the eurozone was 10.5 per cent of GDP.

“The Cyprus public service, therefore, is 50 per cent more expensive than the average cost of public services in the eurozone. If the cost of the public service in Cyprus was closer to the level of the rest of Europe, more than €900m would be saved each year, putting the conditions in place for healthier foundations in the economy.”

DISY said it was with a heavy heart that it referred to the reduction of public sector employment as a positive development, given the high unemployment plaguing the country.

“Unfortunately, however, by reducing public spending and a better distribution of available resources, we will be able to direct resources to more productive investments and lay solid foundations for the future,” it said.

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