Cyprus Mail
CM Regular ColumnistOpinion

Privatisation is no panacea

By Hermes Solomon

THE VIOLENT behaviour last Monday outside the House of Representatives by Electricity Authority workers denoted the beginning of the end of an era.

Privatisation will weaken union power, reduce SGO staff numbers and increase efficiency by whatever means, fair or foul.

Perks will be substituted by profits, and like all public limited companies, board member decisions and end of year accounts, will come under the eye of shareholders, whose sole interest is in receiving attractive annual dividends and watching a share price rise.

This is the way of free market enterprise, and workers at the EAC, CyTA, the Ports Authority, etc. will find their formerly cradle to grave secure jobs under constant threat as soon as troika demands to privatise are enacted.

The last such ‘diaspora’ began in 1963 under the Makarios regime, when Turkish Cypriots were selectively removed from the administration, a subtle form of ethnic cleansing that ended in 1974, when we Greek Cypriots found ourselves alone with just over half the island to do with as we wished. But the difference between 1974 and 2013 is that we can no longer do as we wish.

For the past 40 years, SGO employees have benefitted from strong unions contemptuous of weak, complicit and insipid government.

Today there is no government other than that of the troika, whose demands will eventually be met no matter what politicians and union leaders say.

Privatisation has always benefitted shareholders and made ever greater demands on employees. Due to vastly increased efficiency, British Telecom’s share price has more than doubled over the past three years, although France Telecom’s relentless demands for efficiency has driven eight employees to commit suicide.

On the other hand, Paris has returned its water supply to public control and by doing so reduced consumer bills by 25 per cent.

There are plusses and minuses in privatisation as there is in nationalisation, so let’s not pretend that privatisation is the be all and end all.
Sectors of our civil service could well improve output if they were privatised, yet no politician or civil servant has ever said so.

And is the troika likely to, given that Brussels is made up of civil servants on huge salaries, perks and pensions, all of whom have employed double standards when dealing with Cyprus.

They did so over the banking crisis and bail-in and are doing so again over SGOs.

If Brussels were a Plc it would have been forced into bankruptcy due to persistent non-issuance of end of year accounts.

With an annual budget approaching one trillion euros, the Court of Auditors has not signed off EU accounts for 18 years! ‘Brusselcrats’ now resemble courtiers of Louis XVI, who was executed in 1793, four years after the outset of the French Revolution.

Demonstrators hurling firecrackers and stones, fighting with police to break into the legislature, shouting abuse at deputies and the finance minister, refusing the attorney-general access and cutting the power supply to the building are minor infractions (hardly comparable to the storming of the Bastille) given the government’s intentions to privatise and deprive thousands, not necessarily of their jobs, but of workplace security.

Blaming SGO employees alone for the present SGO predicament is unjust. Are the Cyprus Republic’s administration and ‘Brusselcrats’ any more cost effective and efficient?

The troika ‘diaspora’ of the working classes of Cyprus began with the reorganisation of our banks and will continue with the privatisation of SGOs.

The driving force behind all public service privatisations is enrichment of government coffers and profit for investors/shareholders – not the lowering of household bills for consumers.

If, as the government says, the sole purpose of privatisation is to sell off public assets to repay 1.4 billion euros in accrued government debt then why not radically reorganise these public services to make them profitable, keeping public wealth in the public domain?

Repayment of the accrued debt is an unworthy excuse by government to renege on its election promises to SGO workers.

I mingled with demonstrators outside the House on Thursday evening. Of the thousands collected there, I saw not one wearing a shirt and necktie, a two piece worsted suit or expensive looking brogues.

They were mostly dressed down in casuals that I, a self-confessed snob, would label as clothing of the lower to lower middle classes.

Many demonstrators were somewhat scruffy and unshaven, some smoking and others stuffing themselves with produce from one of the many sandwich/frappe vans parked loosely alongside police vans in the old general hospital car park.

Small electric generators were busy making money as yet more coaches arrived to offload and swell the crowd.

Coherent and combative speeches were broadcast from loudspeakers, some of which I found genuinely solicitous. Do not write off the ordinary man I heard myself saying.

It is he who will rebuild this country’s economy, not the BMW/Merc driver, the concrete palace with pool owner, the bankrupt bankers and property developers, who stole millions and got away with it, the all mouth, well-dressed and indecisive politicians, the impotent media – no, none other than the ordinary man will redeem/reform this country.

And by God, your country needs to hear your voice now more than ever!

Thursday evening’s bungled vote at the House was no surprise. Whether we privatise or reorganise, profitability must be the eventual outcome, and that means the consumer pays more. But do not expect corruption, cronyism and nepotism to disappear from under the microscope after privatisation.

They will simply change to a colour not unique to Cyprus. And Brussels, with its lobbyists, is a prime colour not yet fully under any microscope!

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