The Cypriot annual budget: The neoliberal recipe story – from AKEL Bulletin March 2014
The discussion on the annual budget of Cyprus in the Parliament had less practical impact this time considering the essential role of the Troika in the formation and implementation of this year’s budget. As a result of last March’s decisions of the Eurogroup on the Cypriot economy that led to the entrance of Cyprus into the Support Mechanism in harsh terms for the people and the whole economy, the Cypriots are not left alone anymore to decide on their economic, primarily, planning.
At the same time the Cypriot right-wing government, not only is not accepting the discussion on any alternative than the Memorandum’s deadlock, they are neither in a position to vindicate or seek for an improvement of the memorandum’s terms. The reason for this reality is in fact its alignment with the same neoliberal ideology and this is obvious by several of its unilateral decisions. Moreover, the government is behaving in more neoliberal trends than the Troika itself and the profound example is the fact that it cuts from the budget €626 millions when the Troika demanded €270 millions.
Undoubtedly, this year’s budget brings more cuts on the social fund with the social rights getting further attacked and the right to free access in health and education to be confined. Cuts of €10 millions are introduced on the pensions; €127 million from the social allowances and decrease by 20% of the development fund.
Moreover, the neoliberal agenda includes taxation on the real properties with burdens on the lower strata and facilitations for the large landowners; essential abolition of the free medical care; additional increase of the road taxes; cuts on the supplementary pensions; abolition of the Easter’s fund and the introduction of rates on the public transportation. At the same time any effort for amendments from the opposition for relief of the vulnerable groups are rejected by the government.
While more cuts on the working people are applied for the “sake of the economy”, the Eurostat reveals the increase of profits of several Cypriot enterprises by 10,5% while it estimates profitability that exceeds their best records for the last 20 years. At the same time the salaries have been reduced by 15% and estimated to get reduced further by 30%.
The general negative outcome is certain since we have seen the same story elsewhere: A vicious circle of austerity and recession that leads to a deadlock and povertization of the population.
On the other hand, AKEL has proposed a new economic model which is based in the compatibility of the economic growth and the social cohesion and where the private and social sectors will complement each other. Such a model should be flexible, socially sensitive, and based in the following principles: contemporary, multisided and multileveled growth; social protection of the vulnerable groups of the population and viable fiscal policy in the terms of a flexible and modern state.
