What does the government have to say about the IMF’s recommendations?

Statement by AKEL Political Bureau member & Head of Economic Policy Sector Charis Polycarpou

29 June 2024, AKEL C.C. Press Office, Nicosia

While the government is daily engaging in excessive celebrations over the Cyprus economy’s performance, the IMF is once again putting cuts in wages, the abolition of the Automatic Cost of Living Allowance (COLA) and the 13th month salary on the table. This is without any doubt a glaring contradiction.

Everyone agrees that the public sector needs rationalization and that there is a pay gap with the private sector. However, the solution is not to abolish rights and cut wages, but to improve pay and employment conditions in the private sector through the re-regulation of labour and the extension of collective agreements as provided for in the relevant Community legislation.

Indeed, in conditions of rapid decline in the purchasing power of wages due to wage insecurity, the COLA operates as a counterbalance to enable working people to protect their standard of living. Consequently, the government must turn its attention on ensuring the further regulation of the COLA and not its deregulation. It must focus on the restoration and extension of the COLA to all workers – including those in the private sector – and not on its abolition.

That the IMF is addicted to austerity is not surprising. But the essence is what does the N. Christodoulides government have to say about the IMF’s recommendations?

29.06.2024