THE GOVERNMENT will stress alternative ways than imposing “painful” measures against workers to get out of the current fiscal crisis to the troika, said AKEL leader Andros Kyprianou yesterday.
He hoped other political forces did not go the opposite way and encourage the international moneylenders to impose tough measures.
Speaking after the troika wrapped up its second round of meetings, Kyprianou said the ruling party’s position was that the needs of the state and the banks needed to be looked at separately.
“We clarified to the troika that our demands are to apply to Cyprus what will apply for Spain and possibly Italy and Ireland, in other words direct financing (to the banks) so as not to increase public debt,” he said.
The government and troika have agreed to continue discussions via teleconferencing over the coming weeks, after failing to see eye-to-eye on the structural changes needed to clean up state finances.
According to reports, the government also disagrees with the troika on how to calculate the recapitalisation needs of the banking system, with the gap between the two ranging from €6 billion up to €11 billion. Add to that the €4.5 billion needed by the state to cover its needs for the next two years and the final loan could surpass the €15 billion figure estimated by ratings agency Standard & Poor’s.
During its meeting with the House Finance Committee on Friday, the troika basically passed on the message that Cyprus can forget about the good life for a while.
Troika representatives reportedly told MPs that the recession is here for at least another two years and if measures are not taken, things will get worse. They also reminded deputies that the International Monetary Fund has repeatedly warned Cyprus on the need for structural measures.
Regardless of the size of the loan eventually given, Cyprus will have to take “painful” measures to reduce the cost of the civil service and social benefits, the delegates reportedly said.
“We indicated to the troika that there is more than one path to reach your destination. There are various options and we want to discuss those with them,” said Kyprianou.
“I hope that all political forces will operate in the same way and we will not have some trying to encourage the troika to impose or propose painful measures,” he said, adding that all forces should reach agreement on how to tackle the economy’s problems in a way that workers do not bear the brunt of measures.
Speaking to state radio yesterday morning, Finance Minister Vassos Shiarly said that any measures would have to be discussed with the “social partners” first. At the same time, he acknowledged that some small sacrifices will necessarily have to be taken for the good of the place.