Cyprus Mail
CM Regular Columnist

The corrupt rule of small kingdoms

By Loucas Charalambous

I HAVE written many times about the small kingdoms and fiefdoms which have been operating with catastrophic consequences for the economy and altogether make up the so called broader public sector.

First, we have the kingdom of the state sector in which there are several different fiefdoms, the members of which have more privileges than their colleagues; I refer to teachers, air traffic controllers, employees of the Central Bank etc.

Outside the state services, we have the small kingdoms of the semi-governmental organisations (SGOs) and those of organisations owned by the state. These are CyTA, the Electricity Authority, the Ports Authority, Cyprus Airways, the municipalities etc.

What are these small kingdoms? They are groups of workers, organised into arrogant unions, which, by resorting to blackmail, strikes and political pressure have succeeded – with the complicity of our demagogue politicians – in securing scandalously favourable working conditions and provocatively high pay compared to private sector workers.

Inevitably, the rest of the taxpaying citizens suffer as they are called to pay their high salaries, their extortionate pensions, their retirement bonuses etc. The worst thing is that the state, for four decades, was borrowing money in order to cover these payments, with the result that the public debt in 2013 stood at €21 billion (including the €7.5 billion owed by the state to the Social Insurance Fund which was used to pay wages and pensions to the small kingdoms and in the end was written off).

Considering the disastrous effects these kingdoms have had on the country, one would have thought the guilty parties – politicians and union bosses – would have kept quiet, but the exact opposite is happening. Every day we read in the newspapers horror stories about these small kingdoms.

The CyBC, which has 600 employees, has been asking the government to cover the huge hole of €110 million in its pension fund. This is over and above the €30 million the state pays for the upkeep of the corporation every year. It is now asking that the pensions of CyBC staff be paid directly by the state as in the case of civil servants.

At the EAC they have put together an early retirement scheme so that some workers will leave the overstaffed organisation. The scheme will cost €10 million. But nobody is asking why the authority ended up having hundreds more workers than it actually needed in the first place. On the contrary, our political demagogues, AKEL at the forefront, have been campaigning against the privatisation of these small kingdoms on the absurd grounds that there were national assets.

At the kingdom of the Central Bank, staff salaries are as obscene as those being paid to Cyprus Airways pilots. We have overpaid them so they could supervise the banks which went bankrupt, causing the financial ruin of thousands of families. Instead of forcing them to pay a hefty fine for not doing their job properly, we still carry on paying them the highest salaries in the public sector.

Meanwhile, in the small kingdom of Cyprus Airways, the audacity of the unions knows no bounds. The state has paid hundreds of millions of euro (from borrowed funds) to cover its losses over the years and keep it alive when it should have been closed down 30 years ago. The reason cited for keeping it alive is pseudo-patriotism.

“The country needs a national carrier,” read the placards carried by union members at demonstrations. And why does the country need a bust national carrier? Perhaps it is the airline’s workers that need it so they could carry on collecting their princely salaries, a big chunk of which is tax-free; the state would just have to borrow even more money so we can have a national carrier.

For all these scandalous goings-on the biggest blame is not the unions’. The big culprits are our political demagogues who created these kingdoms in order to win votes and in the process wrecked our economy. President Anastasiades had said a few months ago that he would no longer put up with the small kingdoms. This could only have been a joke. Those who created the small kingdoms are the last people that could dismantle them.

Unfortunately, it looks like not even the troika would be able to do this, because it has allowed our political demagogues to take it for a ride.

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