Cyprus Mail

EDEK and AKEL stance means budget in the balance

By Elias Hazou

A question mark again hangs over whether the state budget will pass after two parties – EDEK and AKEL – have indicated they will give it the thumbs-down.

That sets the stage for a repeat of last year’s happenings, with DIKO holding the key.

Late on Monday EDEK’s Political Bureau decided they would vote down the government’s budget for 2015, when it comes up at the plenum next week.

The budget debate in the House gets underway on Monday, with the vote scheduled for Tuesday.

In a statement, EDEK censured the budget, calling it austerity-driven and kowtowing to the diktats of international lenders.

The party said that whereas Cyprus is next year forecast to post a small primary surplus – surplus excluding interest payments on outstanding debt – the administration has chosen not to tap this “fiscal cushion”.

The budget, EDEK said, is devoid of growth and job-creating projects, the government is intent on pursuing mass and indiscriminate foreclosures on dwellings, packaging and selling loans to third parties, while a ‘safety net’ for vulnerable borrowers is still absent.

The socialist party said its stance on the budget mirrors its rejection of the government’s economic policies.

Main opposition AKEL could go down the same road when the party’s Central Committee convenes this Friday.

“Our orientation is to vote against the budget, which is recession-based and does nothing for economic recovery. But we shall see,” AKEL MP George Loukaides told the Mail.

That would put the spotlight on DIKO. Should the party either abstain or reject the government’s balance sheet, it will not pass, so a positive vote is necessary.

No matter the government of the day, DIKO has traditionally always backed the state budget.

Asked about this, DIKO spokesperson Christiana Erotokritou said her party’s stance should not be taken for granted.

She said DIKO has yet to fix a date for an official party decision on the subject.

But sources within the ruling DISY party suggested that the chances of the budget not passing are infinitesimal.

Were DIKO to abstain, the sources said, AKEL would most probably change its tune and abstain as well, thus allowing the budget to pass on the strength of the favourable votes in the plenum.

“Each party is watching what the other will do… but in the end I don’t think anyone wants to cause real trouble,” the source added.

Similar fears surfaced this time last year when the House was voting on the first post-bailout budget. As it happened, DISY, DIKO and the European Party gave the budget the nod, joined by independent MP Zacharias Koulias. AKEL, the Greens and the Citizens’ Alliance voted against, while EDEK abstained.

The same sources could not recall a single instance when the budget did not pass.

But in the unlikely event the budget doesn’t pass muster, the state can continue to function using the ‘provisional twelfths’ system, where only a sum equivalent to not more than one twelfth of the budget appropriations for the previous year may be spent each month for any chapter of the budget.

This, it’s understood, can go on for two months (up until February), at which time the government must bring a revised budget to parliament.
Should the deadlock persist, civil servants’ salaries would be the first to face the chop.

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