The government’s goal is to reach an agreement with the unions regarding the issue of the cost of living allowance (CoLA), Labour Minister Yiannis Panayiotou said on Monday, emphasising, however, that any possible solution might not fully satisfy all parties.

In private talks with the head of Deok union Iosif Anastasiou, Panayiotou said that the issues surrounding CoLA cannot remain pending for much longer and that “they must be regulated in order to ensure both labour peace and the stability of the economy, which can be achieved through a commonly accepted agreement,” he said.

Panayiotou added that the meeting with the leaders of Deok was conducted in a constructive climate “because reaching an agreement regarding CoLA is a common goal and we are optimistic that, through serious cooperation with all social partners, we will achieve results.”

“However, we cannot fully satisfy all sides and we must also be in line with the state’s fiscal policies and with the capabilities of our economy,” he said.

Speaking on behalf of the union, Anastasiou told the media after his meeting with the labour minister that Deok’s position has been clear for a long time.

He added that the framework established by a transitional agreement with the government on the issues reached in 2017 includes all the parameters, “including the basic one stipulating that any regulation of CoLa must be based on its philosophy, which implies that the purchasing power of wages must be fully ensured.”

“The government needs to be aware that workers are going through a very difficult period due to high inflation,” Anastasiou said.

“This issue should not remain unresolved for much longer. It should be regulated to ensure both industrial peace and the stability of the economy, both necessary things.”

Asked if the unions’ proposal for a gradual restoration of CoLA is their last retreat line, Anastasiou replied that the union’s proposal “facilitates the labour ministry’s wish to have a substantive role regarding the restructuring of the allowance, which will, in turn, result into a final agreement.”

“The gradual restoration of CoLA on one hand ensures that its philosophy is fully safeguarded, and, on the other hand helps businesses as the allowance will not be immediately granted in full, but rather gradually.

“Therefore, we consider it a balanced proposal that should be seriously taken into account, and upon which we can build a good agreement,” Anastasiou concluded.

This sentiment was echoed by members of the Isotita union, who said that employers are under legal obligation to honour the full payment of cost-of-living allowance.

“Any agreements to [instate] CoLA partially and not fully are not binding to any employee of the public and the greater public sector, and are illegal,” the union said.

The transitional agreement which was renewed in 2021 and 2022 is in direct conflict with public service legislation, the union said.

“It is hoped that the generous grants recently provided to specific unions will not affect CoLA negotiations,” the union added, referring to figures published last Friday by the state treasurer, of a total sum of €2,834,195 granted to four unions with Pasydy receiving €990,000; Sek €1,105,150; Peo €592,649 and Deok €146,441.

In its statement, the union also issued a reminder that the former minister of finance had said that the state had saved €105 million by paying out CoLA at the reduced 50 per cent rate.