Cyprus will have to go down to the wire in negotiations with the EU over its privatisation roadmap, a precondition set for the release of the €186 million third tranche of the bailout loan.
With Finance Minister Haris Georgiades in Brussels for a crunch Eurogroup meeting, sources told The Cyprus Daily that the Eurogroup working group had not yet given the go-ahead for the approval of the road map.
The same sources said that eurozone technocrats, who have closely looked into the details of the proposal, do not consider it ‘ambitious enough and vague as to its timeframe’. Georgiades told the state broadcaster from Brussels that backstage negotiations prior to this afternoon’s Eurogroup meeting will determine the outcome, which he expects to be positive.
The Finance Minister’s goal is to persuade his counterparts that the roadmap, approved by the Cabinet last week, can become a “vehicle to a comprehensive privatisations plan”.
Georgiades disclosed that he was in consultations with Brussels technocrats throughout Saturday, clarifying various aspects and has remained in close contact.
The main objections seem to come from Germany and Finland, who require a more radical, fast-paced approach to privatization with a view to covering budget gaps, as they have made clear on several occasions following the memorandum agreement.
The government’s proposal provides for gradual moves as part of a comprehensive three- year plan involving the Telecommunications, Electricity and Ports Authorities. Georgiades assured unions and other social actors in talks last week, that the roadmap does not constitute a private sector hostile take-over, but a piece-by-piece breakdown in which investors will only acquire certain sectors of the organisations and will not control them in their entirety.
The approval of the proposal will see the release of the €186m before the end of the year, concluding the third phase of the islands’ financial assistance plan.
The so-called Troika of international lenders will return to the island in late January or early February 2014, for a further assessment of memorandum implementation.
In spite of government assurances over the privatisation plans, which will help close a €1.4 billion gap over the next three years, unions, including EAC employees belonging to SEK that has moved towards a more government friendly approach on the issue, remain on the war path.
They are finalising plans for a major protest this Saturday, hoping that employees will voice opposition to privatisation plans in their thousands.
In parliament, political parties are mulling over the government bill, with opposition Akel having the outright position that the roadmap will lead to control of crucial state owned assets by greedy private sector investors.
Disy is in favour, while the rest of the parliamentary body seems divided and undecided on how far reaching privatisation should be and at what cost.