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Brussels concerned over prerequisites

11/12/2015 10:27
The apparent change of course in the privatization of the Electricity Authority and Cyta and the government’s difficulty to manage prerequisites of the last evaluation of the adjustment program, causes concerns to Brussels.

Messages have already been sent to the Cypriot authorities from Brussels, highlighting the need to fulfill prerequisites for the disbursement of the tranche of €350 mn.

The prerequisites concern the form and way of EAC unbundling, the creation of a new Cyta company and the approval of bills on labour issues of the organization.

Unionists of the two semi governmental organisations disagree on all prerequisites and their positions are gaining ground as the government said for the first time on Monday, that it does not intent to privatize EAC.

International lenders are warning that in order for the final text in relation to updating the memorandum, to be prepared, the evaluation should be completed, which requires fulfilling prerequisites.

They also note that time is running out as the Eurogroup meeting to be held in early January approaches, where the release of the tranche will be ratified or not.

The government hopes to use €200 mn from the total of €350 mn, of the tranche from international lenders for the recapitalization of the Cooperative.

However, concerns do not only exist in Brussels, but also in Nicosia following developments at Cyta. Trade unions have formed a common front against the privatization of the authority while parliamentary opposition parties are against the privatization of Cyta.

Another negative development according to the government is DIKO engagement, expressed by the president Nikolas Papadopoulos at a meeting of Cyta workers, that his party will vote against all bills related to the privatization of the organization.

DIKO has so far played a key role in passing memorandum bills through the plenary of the House, while it took credit by the government and the ruling party DISY.

As it leaks from the Ministry of Finance, the minster Haris Georgiades is ready to submit the bills on labour issues for Cyta during the cabinet meeting next Monday.

Unions which are organized in Cyta, are asking for a meeting with the President of the Republic in a letter delivered to the presidential palace last Wednesday.

At the same time they ask that the Finance Minister postpones the submission of bills as the response of President Anastasiades on their request for a meeting is pending.

Cyta workers have already decided to hold a mass protest outside the presidential palace on Monday, during the meeting of the cabinet.

The situation is expected to clear up over the weekend when the president returns to Cyprus from Kiev, Ukraine.

However, until now, the Minister of Finance has not made any comments on observations and objections submitted last week by Cyta unions and their legal advisers, on bills relating to labor issues.

The government has already agreed to continue paying Cyta employees all their benefits and transfer an annual cost of about €17 mn for their pensions for the next ten years, to taxpayers.