Cyprus Union of Bank Employees (ETYK) on Wednesday called on the Employers and Industrialists Federation (OEB) to convince its members to pay their loans, which are the biggest part of the non-performing loans portfolio.
Speaking after a meeting with Troika technocrats on Wednesday, Etyk vice-chairman Christos Charalambous said that NPLs were at the focus of discussions with the international lenders, along with the issue of bank bonuses and reducing labour costs for banks.
Charalambous said that through efforts to sign the collective agreements, banks have saved more than 40% in labour expenses, noting that the biggest problem the banks are facing at the moment is collecting NPLs.
Nearly half of all bank loans are considered non-performing and represent the biggest threat to the island’s economic recovery.
He said that the issue of bonuses for bank employees was also discussed and that the union had suggested the freezing of all bonuses for the next three years due to the recession.
Nevertheless, he said that such a possibility was excluded by the banks which claimed that this is an exclusive privilege for bank administrations.
Commenting on the Troika’s response to the above issues, Charalambous said that the lenders are focused on correct management and transparency and that “decisions cannot be made behind closed doors at the expense of depositors, shareholders and employees”.
He also said that the Troika seemed satisfied with the reduction in labour costs, adding that for Bank of Cyprus the cost was cut by 50% and around 45% at other banks.
“I believe that the sacrifices that had to be made by bank employees have been made and we are now expecting management to make the right decisions in order to collect the NPLs,” Charalambous said.
The union vice-president added that it is also Troika’s aim to find suitable solutions and expressed Etyk’s view that efforts need to be made particularly by the industrialists who have the largest non-performing loans.
“OEB will finally have to convince its members to pay their NPLs and not force ordinary Cypriots to pay their loans. The biggest amounts are owed by OEB members and this is where efforts should be directed.”
Major property developers are said to owe a combined €6 billion.
Labour Minister Zeta Emilianidou is today expected to meet with Troika technocrats at 2pm to discuss the Minimum Guaranteed Income.
Speaking after a meeting with the Green Party to discuss the design for introducing the Minimum Guaranteed Income, Emilianidou said that the funding for the new measure has been calculated and it will be funded as it is something the country ‘truly needs’.
The minister also said that the Minimum Guaranteed Income is part of the social reform, while the other part concerns individualised approach and efforts to reintegrate those in need into society.
Greens MP Giorgos Perdikis said that the measure is part of a multi-level upgrade programme for social services that will provide social support on many levels including financial.
“We do not want a reduction of social provision but an upgrade as the state must give emphasis on vulnerable social groups during the crisis,” Perdikis said.