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Our View: Political will and courage needed to move ahead with semi-state sell-off

IT WAS ONLY a matter of time before the government and the troika would reach an impasse over the privatisation of the semi-governmental organisations. There could not have been any other outcome given the government’s feet-dragging on the matter and attempts to find a compromise solution, that would keep everyone happy. But no such solution ever existed, making the government’s prevarication incomprehensible.

News reports suggested the representatives of the troika were displeased with the delays and wanted the privatisation procedure to be speeded up. The government, though, wants privatisation to take place gradually, arguing that Cyprus’ special circumstances did not allow the immediate and total privatisation of Cyta, EAC and the Ports Authority. Cyprus’ special circumstances, related to the fact that all the political parties and unions are dogmatically opposed to privatisation. EAC unions have threatened power cuts in the event that privatisation went ahead, while AKEL has promised to fight it all the way.

President Anastasiades is a prisoner of his election campaign rhetoric, having promised SGO workers that there would be no privatisations and claiming that SGOs would be turned into public companies in which the state would own the majority stake. It was his compromise proposal, which the government is now trying to sell to the troika, by supporting gradual privatisation.

Practically, this will never work, because by selling only a third or two fifths of the shares of the three SGOs would not raise €1 billion by 2016 as had been agreed. It is questionable whether this amount would be raised if Cyta, EAC and Ports were completely sold off. Secondly, there will not be many investors stupid enough to sink their millions in organisations in which the state would be the majority shareholder, while unions and parties would carry on calling the shots. This was the disastrous Cyprus Airways model of ownership.

Everyone knows that SGOs are inefficient, wasteful monopolies plagued by corruption and union abuses. Even the parties accept there is corruption and hope to reduce it by tightening the laws. As for the unions, they are protecting their members, on whose behalf they had been plundering the funds of the organisations for years and want to carry on doing so.

Privatisation, which would allow competition, would not only end the plundering and corruption, it would make SGOs more efficient, competitive organisations that offer a better service to consumers. The government needs to show the political will and courage to move ahead with privatisation, irrespective of the opposition by the unions and the parties. After all, it signed the MoU which set a time-frame for total privatisation. Nothing else, least of all political opposition, should matter.



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