Reform of state utilities that have been agreed with the Troika may not be easy to implement following amendments to the privatisation law that gives parliament a bigger say in the process, experts said yesterday.
The problems that occurred with the approval of the bill indicate the difficulties that the government may face in promoting ambitious reforms as well as the balance that must be kept in order to achieve bailout targets.
Political parties and unions have already managed to make significant changes to the legislation, while further compromises and concessions may be necessary in the future, as the reform plan for the semi-government organisations, the public service and the national health scheme coincide with the next parliamentary elections.
Economists predict that these changes may reduce the value of the organisations and sidetrack the government’s initial timeframe for implementing the necessary changes.
Assistant economics professor at the University of Cyprus Marios Zachariades said that the course of reforms is uncertain as various sides in the House seem to be serving specific special interests of isolated groups.
Finance Professor at UCY Stavros Zenios stressed that political tactics of the past continue to play an important role but that this is something the fragile economy is not able to handle.
He also said that the future of privatisation depends largely on public opinion.
Economics history lecturer at European University Cyprus Alexandros Apostolides said that the House has taken on the role of the memorandum implementer, noting that “if the reforms are delayed due to the House, then the government’s efforts to make parts of the bailout agreement more democratic would have failed”.
Meanwhile, in the aftermath of the approval of the privatisation bill, unions have expressed concerns over the future of the semi-government organisations but also the rights of employees.
However, further industrial action is not expected by union heads who have said that their priority is to protect the workers’ rights through the joint committee, which will monitor and intervene throughout the denationalisation process with the participation of the unions.
According to an announcement by the federation of semi-government employees–SEK, the legislation is unclear regarding the protection of workers’ rights and calls on the government to take the necessary steps to preserve social coherence and live up to its commitments to fortify workers’ rights and preserve labour peace.
Finance Minister Haris Georgiades told state radio that employees’ rights are fully protected by the new legislation but stressed that voluntary retirement plans are necessary in order to render the organisations more efficient and competitive.
The minister added that employees will participate in any decisions made in the framework of the privatisation roadmap, alongside the decisive role of the House.
He pointed out however that the unions and employees do not own the semi-government organisations, but in fact they belong to all Cypriot citizens who through the elected government and parliament have the responsibility and right of making the final decisions.