“When economic indicators make a mockery of reality” by Eleni Mavrou, member of the Political Bureau of AKEL

 

12th December 2015 “HARAVGI” newspaper

This week the House of Representatives will discuss for two days the State Budget for 2016. A lot will be heard about “primary surplus”, the reduction of public debt, growth and development which has arrived or is on its way…

Yesterday the annual report prepared by the Cyprus Labour Institute (INEK) of the Pancyprian Federation of Labour PEO was published. The majority of the mass media ignored it, even though the Report has been issued annually since 2003 and is based primarily on the AMECO macroeconomic database of the European Commission’s Directorate General for Economic and Financial Affairs (DG ECFIN), the Statistical Service of Cyprus and the European Statistical Office. Maybe they ignored the Report because its findings spoil the climate of euphoria that the government and ruling forces are trying to cultivate.

The Report points out the unprecedented for Cyprus widening of social inequalities, which are now assuming dramatic proportions.

The whole burden of the crisis has been shifted on those who have incomes from their work, whereas the incomes of property, that is to say the sum total of profits, interest rates and annuities, were the ones who benefited entirely (this does not mean that there aren’t individual firms that went bankrupt or face serious financial difficulties).

The total reduction of incomes from work allowed those social classes whose income stems from property to maintain virtually unchanged their annual net income, which amounted to 4.9 billion Euros in 2015, compared with 4.8 billion in 2011.

On the other hand, the purchasing power of the average wage is at the level of 1996. In the ranking of the advanced countries of Europe in terms of gross earnings, Cyprus in 2015 occupies one of the last places. Employees are no longer sustained by the 2/3rds of the goods and services they needed in 2011. This is mainly due to the reduction in their purchasing power and the fact that the households of wage earners and employees are severely affected by unemployment.

It is a fact that the end of the recession creates conditions for a slow economic recovery. However, equally important is the finding of the Report that the dramatic reduction in employment of about 11% in the three years 2012-2014, will be addressed (according to the predicted GDP growth rates) only by 1/4th in the three years 2015-2017. That is to say that according to the forecasts of the European Commission services, at the end of 2017 there will be approximately 30,000 fewer working people compared to 2011.

Labour market quality indicators also show a dramatic deterioration. Temporary and part-time employment, long-term unemployed and a dejected labour force have assumed very large proportions and dimensions, while before the crisis they were insignificant phenomena.

You can read the whole Report in the Cyprus Labour Institute website (www.inek.org.cy).

The main conclusion is that the government supports the perspective of growth and development not on the tidying up of the economy (as it propagates so extensively), but on the destruction of the productive capacity, particularly on the one-sided deterioration and downgrading of the living conditions of the mass of working people. In reality the creation of new jobs and the tackling of unemployment do not actually exist in the government’s policy.

So, when you hear tomorrow from the floor of the House of Representatives talk and speeches about the “economic miracle” achieved by the government and ruling forces, remember that this applies only to those privileged few. Besides, it is for these privileged few they care about.