Government confirms that public sector cuts will start before 2013
Government Spokesman Stephanos Stephanou confirmed press reports, on Wednesday, that public servants’ pay cuts will take place before 2013, clarifying that social partners and political parties were already aware of this.
In statements he made to the press after the Cabinet meeting and referring to press reports on the matter Stephanou noted that during the negotiations with the Troika (EC, ECB, IMF) and the discussions held with social partners and political parties the measures package included the last months of 2012.
On the reduction of public sector payroll, he noted, it was clear that there will be measures which have to do with the last months of 2012, adding that in essence the provisions are to do with December and the 13th salaries on a scale basis, as decided on the package that has to do with the Troika – government agreement.
CNA sources say that the Ministry of Finance is already working on the relevant Bills.
Replying to a question as to when a banking diagnostic check run by PIMCO will be ready, Stephanou said that the results are expected so that discussions on the recapitalization of the banks can continue.
He also explained that there are specific procedures that need to be completed in order for the final rescue package agreement to be signed including the matter of the banks’ recapitalization, Eurogroup`s approval and subsequent discussions at member state level, which in some cases concerns adoption of the agreement by national parliaments.
“We still have a way to go”, he said.
Replying to a question about the possibility of a second rescue package agreement having to be signed after the Presidential elections of February 2013, Stephanou said that the government has made it clear to the Troika that the goal of the measures is to boost growth for the recovery of the economy so that there are no further rescue packages and no vicious circle is formed as has been the case with other countries.
The government’s estimates on the measures were very realistic and used conservative rather than optimistic scenarios, he noted.
Replying to a question as to whether preliminary agreement measures will be included during a presentation of the budget before the Parliamentary Committee on Finance and Budgetary Affairs, on Thursday, he said that some measures that have to do with 2013 are already included in the budget. Where it is needed the necessary adjustments and arrangements will be made, he added.
The programme adjustment period is between 2013 and 2016, he noted, replying to another question.
Replying to a question on the date of an awaited presidential address on the matter, Stephanou said that an announcement will be made once it is set.
Cyprus applied on June 25 for financial system from the EU bailout mechanism to rescue its two major banks which sought state aid following mammoth losses due to their heavy exposure to the Greek economy and to secure its refinancing needs.