THE government bill linking pay rises for civil servants with economic growth must be passed, Finance Minister Harris Georgiades said on Wednesday, noting that the state cannot afford pay hikes at this time, with unions arguing for the support of low-wage employees in the broader public sector.
“Introducing the proposed adjustment is of vital importance,” Georgiades said.
“In this context, abolishing the extraordinary cuts and reinstating pay increments become viable options. There is no room for further pay rises during this period, but, naturally, within the state’s capabilities and through the mechanism we wish to introduce, we will be able to discuss and implement further decisions.”
The minister was taking questions from reporters after a meeting with delegations from OIO-SEK and SIDIKEK-PEO unions.
The payroll adjustment proposal is a structural reform, the benefit of which is long-term in nature, as it will safeguard the viability of public finances in the long run.
“It is not a matter of one year, it is not an emergency measure, and it certainly does not impact next year’s budget,” he explained.
“Inevitably, and relatively soon, our concern is that the absence of regulation will push things to derailment, unless a reasonable framework is introduced, such as the one proposed.”
The unions said that, beyond reinstating pay increments, the return to economic growth allows for more demands to be met.
“Given this, we have put forth our demand for further wage improvements,” OIO-SEK chief Andreas Elia.
SIDIKEK-PEO boss Antonis Neophytou reiterated his disagreement with the state-payroll proposal.
“By our calculations, there is room to lighten the load on low-wage earners,” he said, asking that the cuts imposed on employees paid up to €1.500 per month are reinstated.
Meanwhile, the finance minister and the unions agreed to continuing the dialogue on the rest of the issues raised at the meeting.
“The government has raised the issue of compensating ‘haircut’ provident funds, and the creation of a provident fund for those who entered the broader public sector after October 2011,” Georgiades said.
“We believe it is imperative to strengthen this pillar of pension schemes, and ensure adequate oversight and transparent operation.”
In this context, he added, the government is prepared to start a dialogue on the creation of a plan for the gradual strengthening of funds that suffered a haircut.
“The extent to which the haircut provident funds will be compensated, as well as the time and manner of compensation, will be defined through the dialogue,” he said.
But Elia appeared wary of linking such compensation with the general overhaul of provident funds.
“This issue should not be referred to the future – the dialogue must not be endless,” he said.