Cyprus Mail
Cyprus

House freezes CY employee compensation

By George Psyllides

THE HOUSE Finance Committee on Monday decided to freeze €10 million earmarked for compensating Cyprus Airways employees because the government was not clear about what it intended to do with the ailing airline.

The cash is included in a €158 million supplementary budget submitted by the government.

“Not one cent will be paid until we are given clear explanations on what will happen with the company and how the personnel will be compensated,” committee chairman Nicolas Papadopoulos said.

“If there has been a political decision to close CY then we ought to have clear answers,” he said. “They should tell is if there is an agreement to pay compensation and how it will be allotted.”

Papadopoulos, who is also the leader of opposition DIKO, said no such agreement existed as far as MPs knew and warned the government that it should not consider the parliament’s approval a given.

A finance ministry representative told MPs that no compensation agreement or plan existed.

The supplementary budget will be put to the vote at the plenum but the committee has ‘crossed,’ as the process is known, the amount earmarked for CY. This means that the government will need the committee’s approval for the money to be released.

The government is looking for an investor to put money in the airline but despite interest from Aegean and Ryanair, there has not been anything concrete.

It appears both airlines have their own plans for what is and is not valuable when it comes to CY’s remaining assets.

The airline is also awaiting the decision of the EU on whether Cyprus broke state aid rules by subsidising CY with some €75 million in previous years.

It would be impossible for the airline to survive if asked to return the money.

However, a government source said on Friday that the European Commission seems ready to give a positive response if a strategic investor was found and the company completed a restructuring plan that includes shedding 320 jobs and further cuts in benefits. CY currently employs 560 people.

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