Unions' Reaction To Austerity Awaited Today

Trade union reaction to a new package of austerity measures is expected today after an agreement was reached late last week between political parties and President Demetris Christofias.

PEO, SEK and Pasydy trade union bosses are holding meetings today to decide their response to the situation. They have already criticised the measures as unbalanced and a form of 'blackmail' and 'threat', while repeatedly threatening strike action. State school teachers are already taking industrial action by refusing to go to activities held outside school hours.

But analysts say that the trade union movement has been given too much power by the government, which is unwilling to restrict its excesses.

"How can salary raises, COLA (Cost of Living Allowance) increases be given in the public sector in conditions of recession, international crisis and severe financial problems?" said economist Dr. Andreas Theophanous.

This also threatens development because trade unions are carrying out an ideological attack on 'wealth', he said.

The new package agreed between President Demetris Christofias and political parties includes:

-Freezing Cost of Living Allowance (CoLA) and state employee salaries for two years.
-A temporary contribution from private employees who earn more than 2,500 euros per month that will be shared equally by the employee and employer.
-A rise in tax on dividends from 17 percent to 20 percent.
-Reviewing property taxes.
-Passing a bill raising VAT from 15 to 17 percent.
-Savings from social benefits of 200 million euros.
-Combating tax evasion by taxing loans taken by directors of companies and their families, and by withholding salaries for which no regular contributions were made to the Social Insurance Fund.
-Reviewing various financial allowances in the public sector with a view to removing or modifying them.
-Taking steps to support growth such as strengthening small and medium enterprises in cooperation with the European Investment Bank.
-Provide tax incentives for investing profits in development projects and automation.
-Establishing a committee with the Ministry of Finance and political parties related to reducing the operating costs of the public sector and reviewing the contribution from wealthy individuals.

The measures are expected to be voted on in the House of Representatives on December 15th.

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