Cyprus Mail

Coronavirus: OEV calls for paycuts in public sector to support measures (Updated)

The Employers and Industrialists Federation (OEV) on Thursday called for cuts to the public payroll as part of measures to fight the economic fallout of the coronavirus epidemic.

In a letter to the president, OEV chairman Giorgos Petrou emphasised the importance of utilising all available resources immediately to prevent paralysis of the real economy.

“Any hesitation in immediately allocating all necessary resources and adopting the required adjustments can lead the real economy to paralysis and the productive web to decay while rendering the fiscal stimulus ineffective and the blow to the national economy irreversible,” Petrou said.

The OEV chairman suggested that part of the cost of funding the measures should come from a horizontal contribution by all public sector workers who earn over €1,500.

“Potentially burdening the private sector exclusively with the cost of this crisis would lead to acute social conflict with incalculable consequences on social cohesion,” he said.

The chairman of the Chamber of Commerce (KEVE), Christodoulos Anagastiniotis, was in full agreement with his OEV counterpart.

“The impact on the economy will be huge and everyone should share the burden, including all the employees of the broader public sector,” he told the Cyprus Mail.

Among the measures proposed by OEV is a suspension of contributions to social insurance, VAT, income tax, health insurance, excise duties, and any other obligations to the state by businesses, workers and households.

The contributions will be paid at a later stage, long after the crisis ends.

The state must also support businesses who were forced to suspend their operations because of the measures, OEV said.

Businesses that continue to operate despite losing 25 per cent of their turnover should have their payroll subsidised by 60 per cent, OEV added.

The aim of the measures is to prevent any workers from being without revenues for even one day.




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