By Stefanos Evripidou
Bank employees’ union ETYK announced on Thursday its decision to call off a planned two-hour strike for Friday.
The union decided to recall its decision to hold a protest work stoppage from 12.30pm to 2.30pm following a compromise deal reached with the Bank of Cyprus management over the early retirement scheme being offered to employees.
ETYK’s initial decision to call a strike sparked the fury of the employers and industrialists’ federation OEV which accused the union of being “reckless and self-destructive”.
ETYK on Wednesday called on its members to hold a two-hour work stoppage as part of its negotiating tactics with the Bank of Cyprus (BoC) leadership over the early retirement scheme, drawing the ire of business associations.
In a written statement on ETYK’s website, the union demands an extension of the BoC’s voluntary retirement scheme so that when bank employees decide whether to participate or not, they are in a position to know what will happen to their pension/provident funds.
ETYK also demands the troubled bank extends its health and life insurance cover by at least five years and that, when calculating salaries in determining retirement packages, number-crunchers use “pre-haircut” salaries.
The union further demands the government unfreeze all provident funds (the portion not subject to a haircut), so that employees can have immediate access to the funds should they choose voluntary retirement.
According to ETYK, the union wants the early retirement scheme to work which is why it has proposed a further 2.5 per cent increase in salary cuts, taking the total to 15 per cent and pledged to contribute €15m from its own resources to distribute among employees who choose the plan, should the BoC accept its terms.
To highlight their demands and protest the Bank’s stance, the union has decided to call all its members to hold a two-hour work stoppage tomorrow from 12.30pm to 2.30pm.
“If per chance, the bank or any other person involved ignores us then we will be forced to proceed with an escalation of measures,” said the announcement.
The Employers and Industrialists’ Federation (OEV) yesterday condemned the “reckless and self-destructive” call for strike action.
While the rest of the country and political leadership were undertaking “heroic efforts to restore the smooth functioning of the financial system, it is inconceivable that the bank employees union should take strike measures” and undermine efforts to normalise the economy after taking a heavy blow, said OEV.
It added: “Tens of thousands have been made unemployed without any additional payouts from businesses collapsing as a result of recent events. Against this tragic backdrop, it is considered a grave provocation to carry out bank strikes to demand higher additional payouts from a business that is struggling for its survival.”
OEV accused ETYK of undermining the voluntary retirement scheme through its actions to date, arguing that this in turn will eventually result in resorting to the painful option of forced redundancies.
“The only hope for the country to survive is to restore immediately trust in the banking system. ETYK’s strikes have the exact opposite effect.”
The employers and industrialists’ group demanded ETYK call off the strike threats, adding that the tolerance shown by businesses and society so far has finally reached breaking point. It also called on the state to intervene and reverse “ETYK’s destructive intentions”.
Cyprus had to wind down one lender, Laiki Bank, and use, or bail-in, customer deposits exceeding €100,000 to prop up BoC, as part of the bailout agreement.
Provident funds were also affected by the bail-in, which has not been completed yet, and the uncertainty is hindering the lender’s retirement scheme.
An asset evaluation of the BoC, undertaken by KPMG London, is expected to be handed over today, while part of the asset evaluation of Laiki was delivered yesterday, and the remainder is due tomorrow, according to reports.
Completion of the asset evaluation brings the resolution authority, the Central Bank of Cyprus, closer to calculating the final rate of the bail-in of bank deposits at the BoC.
Reports suggest the final figure could be known within the next two weeks, if not earlier.
So far, 37.5 per cent of uninsured deposits at BoC have been seized and an additional 22.5 per cent was blocked and could follow the same fate.
From the remainder, depositors can only use 10 per cent.
Unconfirmed speculation doing the press rounds last week suggested the final bail-in percentage will be around 50 per cent.
Finance Minister Harris Georgiades has said he discussed getting an advance from international lenders to cover the provident funds of bank employees who chose to leave BoC under the retirement scheme.
However, to be able to ask for the advance, the final rate of the bail-in must be finalised.
Georgiades reiterated that the haircut on the provident funds of Laiki employees will be the same as that of their BoC colleagues.
Provident funds are not covered by the deposit protection scheme, but the government has pledged to limit the losses of provident fund members to around 25 per cent of the amount they would have received before the EU decision to restructure the two Cypriot banks.
If for instance the haircut at the BoC reaches 50 per cent, workers will immediately receive the rest. Employees will receive the additional 25 per cent when they reach retirement age.