Cyprus Mail
Cyprus

Privatisations freeze will extend bailout programme: DISY (updated)

By George Psyllides

Ruling DISY said on Tuesday that an opposition proposal to suspend privatisations until 2017 would only serve to extend the duration of the island’s bailout programme at a time when the country was close to exiting.

“Unfortunately they seem to act as if they want Cyprus to remain in the memorandum,” a DISY statement said, asking why main opposition AKEL was proposing to suspend privatisations until 2017.

“What’s going to happen by then? What will change by 2017?”

On Monday, Green party MP Giorgos Perdikis said AKEL was mulling drafting a legislative proposal to freeze privatisations of semi state organisations until 2017.

AKEL said on Tuesday it will seek co-operation with other opposition parties with the objective of freezing the procedure.

Party spokesman Giorgos Loukaides said it will do everything it can to prevent the sell-off of “our national wealth and we will be on the side of workers and society until the end”.

AKEL claimed the government had admitted that privatisation of semi government entities was not about the proceeds, nor because they were included in the memorandum, it was clear that the matter was linked to the administration’s effort to serve big private interests instead of the interests of the Cypriot people.

“Consequently, our obligation as opposition parties is to find the ways to coordinate, to put an end to these approaches as soon as possible,” Loukaides said.

Such a move would represent a direct challenge to the bailout agreement, setting the stage for a clash with the government, which is obliged to comply with the terms set by its international creditors.

To repay a €10bn bailout, Cyprus must generate proceeds from privatisation of at least €1bn within the bailout programme period (by 2016) and €0.4bn outside.

DISY said the proposal “does not present any benefit, nor does it have any other political logic, apart from extending the memorandum at a time when our country is on the final stretch of exiting.”

DISY chief Averof Neophytou said privatisations were necessary because they would bring in foreign investment, increase competitiveness and create additional jobs.

Neophytou wondered if AKEL agreed with privatisations and its only problem was the time.
H

e questioned why the party had not prevented privatisation of the airports while part of the coalition government at the time and why it agreed to privatise the Development Bank in 2007.

Privatisations were included in the November 2012 memorandum that the previous administration agreed with, Neophytou said.

EDEK suggested selling part of the organisations’ shares to a strategic investor who would be responsible for the operation but the ownership should remain with the state.

The party said shares must also be sold to the public and the workers, whose rights and interests must be fully secured.

The state will continue to supervise to prevent the organisation from abusing its dominant position, EDEK said, adding that any profits should be used to finance development projects.

DIKO said for quite some time now, it has been advocating renegotiation of the memorandum and suspension of privatisations amid the economic crisis.

“The issue is not one of time, but of one of substance,” the party said.

DIKO said it was working on a proposal that ensured there would not be a sell-off, workers would not be victimised, and the economy would not suffer further negative consequences.

“The guiding principle should be the interests of society, the economy, and the state, and not validation of the ideological obsessions of any side,” DIKO said.

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