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Our View: It’s all about pensions, stupid

THERE seems to be no end in sight to the saga of SGO privatisations. Yesterday, port workers returned to work but kept an overtime ban in place. They had staged a 24-hour strike on Friday, forcing ships to go seek other ports at a significant cost to the economy. Meanwhile, Cyta employees demonstrated outside the legislature yesterday as the finance committee discussed the government’s privatisation bill in the presence of finance minister Haris Georgiades.

The committee will meet again tomorrow and possibly next Monday to discuss the bill, even though three parties (Akel, Edek, Greens) have already made clear their intention to vote against it. Diko has still not made up its mind, its leader Nicholas Papadopoulos undecided over whether he would want to cause problems to the government over the president’s Cyprus problem policy. Diko’s ministers abstained from the vote on the bill in the cabinet on the instructions of their leader.

SGO unions have set three conditions, which Georgiades yesterday assured would be met. They want the representatives of the workers to participate in the decision-making with regard to privatisation and the legislature to have a say over all the privatisation bills – the latter to ensure against the government pursuing its objective through issuing decrees. Georgiades assured deputies yesterday that these conditions would be met adding that the finance committee could even make changes to the privatisation bills.

The real concerns of the unions are the pension rights of the SGO workers. Unions want guarantees that these would not be affected by privatisation. Georgiades said that pension rights were protected by law and would not change by the bill under discussion. SGO pension funds are protected so much that, by law, the state undertakes to cover any losses incurred from bad investments made by these funds. Unions want this scandalous law that guarantees the super pensions of SGO workers to remain in place.

There is another possible pension-related problem. Given the big pensions paid to workers, many of the funds might not be sustainable. The unions want guarantees that pensions would remain at their current, absurdly high, levels after privatisation. But why should the taxpayer be burdened with this cost in the future when the rational solution would be to reduce the monthly pensions paid to SGO retirees. There is certainly no strategic investor who would touch a SGO without this issue having been resolved. And for the impoverished taxpayer to under-write the pensions would be a criminal decision by the politicians.

Unfortunately, nobody is openly discussing this matter, because they do not want to have the row with the unions. Yesterday, Georgiades restricted himself to making a vague general statement. “I consider more substantial the political commitment that among the many targets we have set for the privatisation programme, the undermining of the interests of the workers is not included.”

There must be transparency on this issue because the politicians cannot be trusted to take a decision that is in the interest of the taxpayer, if things are done secretly.

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