Cyprus Mail
Business Cyprus

Etyk marches to presidential palace for more compensation

Etyk considers the government decision on provident funds to be 'deficient and tricky'.

By Stelios Orphanides

Bank workers’ union Etyk asked its members to march to the presidential palace on Tuesday to protest the government’s decision to allocate further €20m to compensate for losses of their provident funds.

Etyk advised its members to leave their work earlier on Tuesday and gather at its headquarters in Nicosia before marching.

“We were surprised and disappointed to hear of the latest council of ministers’ decision,” the union said in a statement on its website in reference to Thursday’s decision to increase taxpayers’ money allocated for this purpose.

The government made available €300m in 2013 for this purpose and pledged another €168m in July as part of its promise to recoup 75 per cent of the losses suffered in 2013 banking crisis. The decision angered Etyk, known for its militancy.

The union says that the deposits the provident funds held at banks in defiance of repeated supervisory advice to avoid risk concentration had been “stolen” and demand that the government covers 100 per cent of the losses.

Provident funds, mainly those of bank workers, held €1.1bn in deposits before the bail-in in March 2013.
The scheme announced on Thursday by the government relaxes criteria for those affected who already left their job at Bank of Cyprus after it absorbed the operations of Cyprus Popular Bank, widely known as Laiki.

“This decision was taken without any communication with our organisation whatsoever,” Etyk said dismissing the government’s position that “the matter had been extensively discussed”.

“We still have no complete and clear picture about the content of the decision but we consider it deficient and tricky,” the union claiming Bank of Cyprus offered to cover the remaining losses only in exchange for the introduction of new remuneration system which provides for the reduction of pay scales and annual incremental pay rises.

The Fiscal Council and the European Commission warned Cyprus that while the fiscal impact of compensating provident funds for their losses was limited, it increases the systemic risk and may have unforeseeable consequences.

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