Our View: No open economy can allow unions to blackmail it

The audacity of the Electricity Authority’s unions knows no bounds. After years of saying absolutely nothing about the high electricity rates Cyprus households and businesses had been paying, they have now decided to pose as the champions of low rates. All the unions representing the EAC’s well-rewarded workers sent a letter to the authority’s board, referring to a “situation that leads to and maintains the high cost of energy and at the same time puts the safety of supply and production adequacy in serious danger.”

It is astonishing that the unions have finally awakened to negative consequences of the EAC monopoly, which these unions have been doing everything in their power to preserve. Not that they were calling for the end of the monopoly which ensured the high salaries and many benefits they had secured for the authority’s employees over the years. In fact, for the last ten years, the unions, with the support of the pro-monopoly parties, have been blocking all government attempts to open up the electricity market.

The previous government, urged by the Troika, started working on this in 2016, but eight years later nothing has been done. The date kept being pushed back by the EAC management who were members or sympathisers of the unions, missing every deadline that was set, on the grounds that it was not ready. Unions also blackmailed the government into giving control of the transmission system operator to the EAC, even though it should have been an independent body buying electricity from all producers. The compromise was that it would be staffed by EAC workers, which makes a mockery of independence.

The unions that prevented competition and ensured electricity rates were among the highest in the EU are blaming others for high electricity bills. Ultimately, weak politicians that always gave in to the unions have a large share of the blame for this situation. Now that the politicians are not dancing to the unions’ tune – they have been accused of not implementing decisions taken with the unions a year ago – they are in the firing line. These serious decisions “remain on paper because, it seems, some invisible hands are preventing their implementation,” said the letter.

Behind this insincere concern for the high electricity prices are union demands for the hiring of more staff and the strengthening of the EAC’s already dominant position through the use of renewable energy sources for power production and the introduction of energy storage. With its vast resources, the EAC could wipe out the competition when it enters the RES market, especially as it would also introduce energy storage which it had refused to consider as long as RES were in the private sector. In short, the unions want to protect itself as much as possible when the electricity market eventually opens, and it is faced with competition.

The government must not give in to the unions which are meeting on Monday to decide on whether to take strike action. They should be left to strike, regardless of the consequences, because no open economy can allow unions to blackmail it into preserving a monopoly.