In an attempt to show he was a magnanimous winner committed to building unity, after his re-election President Anastasiades announced he would go through the election manifestos of his rival candidates and adopt their policy proposals that he thought would be good for the country. It was an example of the superficial gesture politics he excels at and a way of thanking the two candidates that avoided backing his rival in the run-off.
First, he invited the leader of the Citizens’ Alliance Giorgos Lillikas to the presidential palace and after the meeting it was reported that among other things the president would adopt the proposal for subsidised heating fuel for residents of mountain villages. Three weeks ago, the independent, Akel-backed candidate Stavros Malas left his self-imposed political exile for a day to meet Anastasiades and exchange views about his proposal for regulating industrial relations (it was in his election manifesto) as well as explaining his ideas for investing in research and innovation.
The theatre with Lillikas and Malas was merely the warm-up act, preparing the setting for bringing Diko leader Nikolas Papadopoulos into the fold. On Wednesday Papadopoulos forgot his vitriolic attacks on Anastasiades during the campaign and stepped into the presidential office ostensibly to discuss the progressive policy proposals of his election manifesto. Not surprisingly the proposals the president agreed to implement were the type all our politicians embrace and consisted of spending the taxpayer’s money on supposedly worthy causes. Increasing state spending is the only economic policy that our political leaders understand and support unquestioningly.
Now that Anastasiades has become an undisguised hardliner opposed to bizonal, bicommunal federation he has no real political differences with Papadopoulos and Wednesday’s meeting was an indication that the Diko leader agreed an informal (perhaps loose) alliance with the president and Disy. Diko participated in the 2013 Anastasiades government for its first year in office before Papadopoulos decided to withdraw over disagreements on the Cyprus problem. Now these disagreements have disappeared and the two have become fellow travellers he has no qualms about having an understanding of co-operation with the Anastasiades government even if it is not formalised.
This co-operation was brokered by Disy leader Averof Neophytou, who was present at the part of Wednesday’s meeting that secured the support of Diko for the 2019 state budget. In exchange, Papadopoulos had asked for three measures beneficial to certain social groups and these were granted by the president. On Thursday Neophytou announced that his party and Diko were preparing a ‘social package’ allocating the dividends of the economic recovery to deserving groups. The ‘social package’ would include an increase to the lowest pensions, a 15-cents per litre reduction in the fuel consumption tax and a scheme to support vulnerable homeowners that did not default on their loans – a reward for reliable borrowers.
The reimbursement of reliable but vulnerable borrowers is madhouse economics and Diko estimates it would cost the taxpayer €30 million, as much as the scandalous Estia Scheme, which will reduce the loans of strategic defaulters. The total cost of the ‘social package’ would be close to €100 million but could still rise as Neophytou said the two parties would also look at ways of supporting the self-employed who will see their income fall from March when they would start contributing to Gesy.
Diko’s informal alliance with the government has a very high cost for the taxpayer, even if the government would in this way buy the party’s support to get reforms through parliament. The reform of Cyta and local government were the two reforms mentioned. Interestingly, the last time these bills were taken to the House plenum Diko voted against them. Now that the government has decided to squander more of the taxpayer’s money on behalf of Diko, the party’s opposition will vanish.
While this high-maintenance alliance will ensure the government’s reform bills are passed a broader issue is raised. One of the main reasons people voted for Anastasiades was that the prudent management of the economy would continue. If they had wanted a government that mindlessly wasted state funds on cash handouts to different social groups they would have elected Papadopoulos president in February. They did not and Anastasiades is cheating his voters by agreeing to implement Papadopoulos’ wasteful policies.
Then again we should not be surprised because Anastasiades has a knack for pretending to be what he is not. He pretended to be a pro-settlement president, which quite clearly he was not, while the idea that he was committed to prudent economic policies was exposed as a myth long before he invited Papadopoulos to help with the squandering of the taxpayer’s money. We dread to think what will happen to public finances now that these two big spenders have decided to join forces and will have a majority in the House to approve their ‘social packages’.