Concerns over an alleged expansion of the state wage bill do not reflect reality, public servants’ union Pasydy said on Wednesday, responding to reports linking rising personnel costs to the cost-of-living allowance (CoLA), annual increments and potential general salary increases.

The union said projections contained in the finance ministry’s standard budget circular formed part of the routine process followed each year in preparing state budgets and should be viewed within that context.

According to Pasydy, the estimates are intended to account for all relevant economic parameters and do not in themselves indicate an unsustainable increase in public sector spending.

Addressing the issue of CoLA, the union noted that a permanent agreement had recently been reached between the government and social partners for the gradual restoration of the mechanism in line with its longstanding principles.

The agreement, it said, had helped restore stability and balance in labour relations.

Pasydy added that safeguards had also been introduced, including the activation of CoLA only when inflation growth in the previous year is positive, as well as a 4 per cent cap on the annual increase used to calculate the allowance.

“In light of the above, the issue of CoLA should now be considered settled and fully manageable by all parties,” the union said.

On the question of general salary increases and annual increments, Pasydy said it was only natural for the finance ministry to factor such costs into medium- and long-term fiscal planning.

The union pointed out that the last general salary increase for public servants took effect on January 1, 2009, and that no general increases had been granted since then due to the financial crisis and the fragile economic environment that followed.

Pasydy also said that, in coordination with other major trade unions, it had adopted a responsible approach throughout the period by refraining from submitting claims for general pay rises, taking into account the needs of the Cypriot economy.

The focus now, it added, was on monitoring economic and fiscal developments during the 2025–2027 period, rather than 2027–2030 as some reports had incorrectly suggested.

According to the union, the aim is to assess whether fiscal conditions will justify a new, evidence-based joint request for general salary increases alongside other trade unions.

Such a request, it said, would seek to ensure that employees receive a fair share of the benefits stemming from improved economic indicators, sustained economic growth and higher productivity, while remaining within the state’s financial capabilities.

“Anything else that is being written falls within the realm of misinformation,” the statement concluded.