HOPES that things would calm down after the memorandum of understanding was agreed with the troika have proved wishful thinking. While the political parties appeared have toned down their rhetoric, by a notch or two, Friday’s publication of the memorandum seems to have re-kindled the defiant populism that we had been served for months now.
On a plus point, Friday’s meeting of the big unions – PEO, SEK and PASYDY – suggested they did not plan to cause too much trouble, their only decision being to stage a work stoppage of couple of hours during which workers would march to the legislature. It is a mild reaction, indicating they have come to terms with the need for a bailout. The same could not be said of the teaching unions, which have been making all types of threats in their militant-sounding announcements, but on their own they are unlikely to have much impact.
Then again, it was the two big unions, PEO and SEK, which organised Thursday’s protest by several hundred casual labourers employed by the government that turned into a mini-riot. It showed how things could get out of control, even though this was not the intention of the unions. Angry labourers first invaded the finance ministry, seeking a meeting with the minister before storming the House of Representatives and demanding that the decision not to renew their contracts was rescinded. Neither the police nor the union organisers could stop them when they decided to enter the House en masse.
Speaking on a radio show the next morning, a union official could not resist blaming the troika for the decision not to renew the contracts of a thousand casual workers; this would save €9 million a year. Blaming the troika is the easy option for union leaders who purposely ignore the fact that troika officials set savings target and it is up to the government technocrats to decide how these would be realised. If the government proposed saving the amount by docking an additional two per cent from the wages of the top-earning public employees, the troika would not have objected.
We mention this because the widespread practice of putting the blame on the troika must stop. It creates unjustified public anger and resentment that could lead to more violent behaviour than was witnessed at the legislature on Thursday. It is high time the government accepted responsibility for the bailout agreement and explained to the people that the troika was not our enemy – admittedly difficult after the president and his associates publicly branded the IMF, ECB and the Commission ‘neo-colonialists’, ‘enemies of the working people’ etc – but was essentially helping the government secure loans it desperately needed.
The troika technocrats were here to help us take the necessary measures that would convince our lenders that we would be in a position to repay the loan our economy needed to avoid collapse and bankruptcy. Without the spending cuts, higher taxation and reform of structural weaknesses envisaged by the bailout we would not be able to borrow money from anywhere and our banks would be unable to draw liquidity. And the troika team would argue our case as regards the loan at European working groups. In short, we should be treating it as an ally.
This might be too much to expect from President Christofias who is dogmatically opposed to pay cuts and has made a big contribution to the public demonisation of the troika. But he would be doing the country a big service and helping our effort to secure European approval for the bailout if he took a positive approach in his address to the people, scheduled for this week. If he cannot bring himself to be constructive, and plans on repeating his negative sentiments, it would be much better not to make his address.
Apart from rousing public anger and encouraging anti-bailout protests, negative comments are unlikely to go down well with our lenders who start discussing the Cyprus bailout at tomorrow’s Euro Group meeting. The Group will meet again 10 days later, when the interim Pimco report on the bank re-capitalisation needs would be ready, but whether it would give its approval then nobody knows. A decision might be put off, additional changes could be made to the memorandum or, ideally, it would be approved. If all goes well, the approval of national parliaments would also be required.
Organising public protests against the bailout, heaping abuse on the troika, attacking the ‘neo-liberal’ measures could put at risk the approval of the bailout. We cannot even afford delays in the approval, which is why we need to do everything in our power not to alienate our lenders. It is time for everyone that influences public opinion, from the president down, to show a heightened sense of responsibility, urging restraint and making it clear that the bailout, unpopular as it may be, is our only option.